Wednesday, 11 September 2019
Appropriation Bill (No. 1) 2019-2020, Appropriation Bill (No. 2) 2019-2020, Appropriation (Parliamentary Departments) Bill (No. 1) 2019-2020; Second Reading
I'm pleased to support these appropriation bills, which make provision for the moneys required to be appropriated from the Consolidated Revenue Fund, as part of the 2019-20 federal budget, to fund the day-to-day operations of the Commonwealth. Appropriation Bill (No. 1) 2019-20 provides for an appropriation of $58.4 billion to fund the ordinary annual services of the government, which includes the departmental costs of Australian government agencies, and funding within administered outcomes, which have been previously endorsed by the parliament. In particular, there are a number of key appropriations worthy of note. The Department of Defence has been allocated $19.7 billion to enhance the military capabilities of our nation, to protect and advance Australia's strategic national interests and to promote regional security and stability. Included is funding to support ongoing Defence operations.
Australia is located in the dynamic geopolitical region, which is home to a number of emerging nations that are investing heavily to expand their military capabilities. It has been a key priority to increase Australia's defence spending to two per cent of gross domestic product. In order to maintain and enhance the effectiveness of the Australian Defence Force, we must invest in facilities, infrastructure, equipment, weapons, technology and personnel to protect and defend our nation and its national interests.
It is reassuring to see continued investment in our domestic defence industry, which ensures that local expertise is maintained. In Western Australia, major infrastructure projects and upgrades are being completed at Army, Navy and Air Force bases located at Campbell Barracks, HMAS Stirling and RAAF Pearce. Our local defence industry, located primarily at the Australian Marine Complex at Henderson, employs many Western Australians in shipbuilding and allied industries.
The Department of Health will receive $6.3 billion to strengthen health services for all Australians and to support better mental health services. Resources have been allocated to alcohol and drug support services and towards improving access to aged residential care and home care services, increasing access to medicines and implementing the Sport 2030—National Sport Plan. In my electorate the federal government has already delivered $158 million in funding towards a proposed $360 million extension of Joondalup hospital. Expanding the Joondalup hospital will reduce emergency department waiting times and alleviate the need for local patients to travel long distances to Perth for medical treatment. However, the WA Labor government has reneged on its 2017 election commitment to contribute 50 per cent of the funding required to extend the hospital. To date, no provision has been made in the McGowan government's budget for its half-share of the Joondalup hospital expansion. This is an unfulfilled election commitment which is forcing many residents to drive long distances to Perth for medical treatment—in most cases, a two-hour round trip for each medical appointment. We must put pressure on the WA Labor government to commence construction of the promised extension to Joondalup hospital.
It is the coalition government's priority to provide a greater range of medical services in Joondalup. As our population ages, there is a need to provide more aged- and respite-care facilities to meet a growing need among my constituents. It is encouraging to see additional aged-care facilities planned for Iluka, Currambine, Edgewater and Joondalup. The federal government is ensuring that an adequate number of places are funded each year for our elderly residents. The appropriation bill allocates $5.6 billion to the Department of Social Services, including funding for the Commonwealth contribution to prevent domestic violence against women and children; the expansion of the cashless debit card, to tackle drug, alcohol and gambling abuse; and the establishment of a royal commission into violence, abuse, neglect and exploitation of people with a disability.
The National Disability Insurance Scheme is being implemented across my electorate, with a service provider based in Joondalup. It is essential that witnesses receive the care and support packages they need to meet their daily living requirements. Community consultation has been conducted to receive feedback from participants about how the rollout can be improved. The federal government is providing the necessary resources to ensure that the delivery of services is orderly and meets community expectations.
In the Moore electorate there are many non-government organisations working tirelessly to provide social services to people in need, including the Spiers Centre, the Salvation Army and many church based organisations delivering relief services. These charitable organisations are staffed by dedicated volunteers and conduct their own fundraising activities with support from the local community. The federal government provides financial assistance to these worthy organisations through programs such as Stronger Communities and Volunteer Grants, which continue to be funded in the current budget.
The provision of $3.2 billion has been made to the Department of Foreign Affairs and Trade to advance Australia's international strategic security and economic interests and to manage and distribute Australia's official development assistance. In particular, our diplomatic engagement with emerging nations in South-East Asia and the Indo-Pacific region will promote increased regional trade and economic development in a region which is experiencing strong economic growth. Economic security will in turn promote stability, good governance and national security through cooperation with neighbouring nations. Similarly, $2.5 billion has been provided to the Department of Home Affairs to fund additional national security measures, including the management of noncitizens within onshore and offshore detention; to better resource the Australian Border Force to facilitate the legal movement of people and goods across the border; and to provide refugee and humanitarian assistance. Australia's aid program is generous, orderly and equitable.
Treasury received $3 billion to implement recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the resourcing of the corporate tax avoidance task force and the expansion of single touch payroll. These measures are designed to assist small business. It is important to ensure that finance brokers and financial planners—many of whom are small business operators—are not adversely impacted by overzealous regulation. Comprehensive and adequate consultation with the financial services industry prior to implementing reforms to protect consumers is essential. I recently held a forum in my electorate where local finance brokers could raise their concerns. Australia has a strong financial services sector with good governance fundamentals, so government should exercise caution when regulating the industry.
Moving on to Appropriation Bill (No. 2) 2019-20, an appropriation of $7.4 billion is provided to fund the non-ordinary annual services of government, including capital works and services, payments to the states, territories and local government authorities, and funding for new administrative outcomes not previously endorsed by parliament. In my electorate, the City of Joondalup receives financial assistance grants from the federal government for the purpose of road construction and also in the form of general purpose financial grants. Last year, the City of Joondalup received $2.9 million in federal financial assistance grants, which has helped to subsidise the amenities provided to ratepayers. Appropriations include $2.3 billion to the Department of Defence to enable the purchase of military equipment and the construction of support facilities and infrastructure in line with the commitment to implement the strategic capabilities outlined in the 2016 defence white paper. As I mentioned earlier, my Perth based electorate is located in close proximity to RAAF Base Pearce, the HMAS Stirling naval base and Campbell Barracks, all of which are being refurbished and upgraded to modernise the facilities and bolster our security.
Whilst the rollout of the National Broadband Network is progressing well across Australia, there are some older established suburbs in my electorate which are yet to receive satisfactory service. My office has assisted individual cases. To improve broadband digital connectivity, $1.7 billion has been allocated to the Department of Communications and the Arts to provide NBN Co with a government loan on commercial terms to support the completion of the National Broadband Network across Australia. A number of constituents in the established suburbs in my electorate have contacted my office to express concerns about access to the NBN. These concerns have been conveyed to our NBN parliamentary liaison channels, and this additional funding will provide NBN Co with the necessary resources to address the connectivity issues in a more timely manner.
The Department of Infrastructure, Transport, Cities and Regional Development has been allocated $1.3 billion to fund airports and inland rail projects, concessional loan funding for the National Water Infrastructure Loan Facility and payments to the states for the Roads to Recovery Program. Local government authorities across Australia rely on the Roads to Recovery Program to complete important road safety projects, including many arterial roads in the cities of Joondalup and Wanneroo. The horticultural industry in the city of Wanneroo is facing a shortage of water allocations for fruit and vegetable growers and would benefit from this federal investment in water infrastructure. Our local horticultural growers would benefit from access to recycled water from local waste water treatment plants located at Beenyup and Alkimos being diverted for use on crops or to recharge the groundwater aquifers which are being depleted for household use. The bill provides $295 million to the Department of Agriculture for concessional loans to farm businesses, including loans to those affected by drought or flood.
To the north of my electorate, the extension of the northern suburbs railway from Butler to Yanchep will provide a continuous rail connection between Yanchep and the Perth CBD via Joondalup. This key investment and public transport infrastructure will bring commuters into central Joondalup from Perth to the south, and the growing residential corridor to the north, giving local businesses a much needed economic boost. There is scope to transform Yanchep into a major strategic regional hub through the smart cities program, taking advantage of upgraded road access provided by the NorthLink WA project, to form a gateway to the productive agricultural regions via Muchea, with the potential for a regional airport.
The third bill, Appropriation (Parliamentary Departments) Bill (No. 1) 2019-2020, provides for the services of the parliamentary departments with funding of $161 million for a range of initiatives.
In concluding, I commend these appropriation bills which make provision for the moneys required to be appropriated from the Consolidated Revenue Fund. As part of the federal budget to fund the day-to-day operations of the Commonwealth, this legislation enables the provision of improved services, facilities and amenities for the benefit of my constituents. I commend the bills to the House.
In making a contribution on the appropriation legislation before the House, I want to raise the issue of homelessness. Some of the most distressing and desperate circumstances that come across my desk—or visit my office, quite frankly—relate to constituents who are at risk of homelessness, and I am sure that's common for many of us. According to the 2016 census, homelessness in Australia has increased by 13.7 per cent over the last five years. That's approximately 116,000 Australians who are experiencing homelessness on any given night. What a tragedy in a country like Australia.
While homelessness and housing instability is a very real problem across the nation, it is particularly dire in electorates like mine, where there's an overrepresentation of disadvantaged and vulnerable individuals and those trying to support their families in those circumstances. Issues such as mental health, disability, unemployment, relationship breakdown, substance abuse, gambling addiction, and family and domestic violence can all put people at risk of homelessness. Sadly, I see this occurring disproportionally in my electorate. The constituents that come to my office are often dealing with very complex and multifaceted issues. These vulnerable individuals frequently end up stuck in a very vicious cycle. Housing instability and homelessness often increase vulnerability to adverse social and economic circumstances. These individuals and their families face a greater risk of poor outcomes in education, employment and health, as well as an increased risk of being involved with the justice system of our nation.
Women and children are at greater risk of homelessness as a result of domestic and family violence. Violence against women is one of the most serious and distressing issues facing our community. Women on temporary visas who are escaping violence have no access to welfare and no work rights; they face language barriers and are restricted from seeking appropriate help. Often they are socially isolated, may not have the support of family and friends in Australia and certainly are not able to afford social housing. There are many such people in my electorate—immigrants and refugees—and, until they are given permanent citizenship, this can be a very significant issue for them.
Recently Mission Australia released a report that identified domestic and family violence as one of the main reasons women and children are becoming homeless in Australia. In light of the astounding statistic, the CEO of Mission Australia, James Toomey, said:
We need to do more to prevent, reduce and ultimately eliminate domestic and family violence if we are to have any chance of ending homelessness.
That's a pretty powerful quote.
Local service providers in my community certainly agree with his view on this. For instance, the CEO of Bonnie Support Services, Tracy Phillips, said, 'The biggest challenge faced by support and safe accommodation services for women is the severe shortage of affordable and social housing.' Local service providers are struggling to keep up with the demand for crisis accommodation and transitional housing as women in greater numbers are now sleeping rough, and that figure continues to rise—
A division having been called in the House of Representatives—
Sitting suspended from 10:50 to 11:02
Further, there are systemic barriers impacting on women existing on Newstart or low incomes, particularly those who don't have a rental history, and, as I've already mentioned, on women who are on temporary visas without social security payments or social support. What is clear is that it is women who are at the most immediate risk of homelessness in our society. With the lack of long-term social and affordable housing, women, particularly those experiencing domestic violence, will continue to be pushed into homelessness.
A further point on the issue of systemic barriers is the government's position on the rather dismal rate of Newstart. I think every member here has to ask themselves, 'How does anyone live on $40 a day, covering the cost of food and transport, particularly given the rising costs of housing?' The simple answer is that they don't. The government has been pressured from all quarters of the community to lift the Newstart rate, yet the Prime Minister is determined that that will not occur under his government. A recent survey conducted by the Australian Council of Social Service found that more than half the people on Newstart who participated in the study have less than $100 left each week after paying their housing costs. That's $100 each week to live on.
The chronic shortage of social housing and affordable homes and the increased levels of housing stress also place people on Newstart at an extremely high risk of becoming homeless. Many individuals have to rely on the support of families and friends to simply have a roof over their heads. Without the support of refuge services, including those offered by charities, such as the Women's Housing Company or St Vincent de Paul Society, many of these people wouldn't even have that.
Karen Devins, the specialist homelessness services manager at St Vincent de Paul, voiced her concerns about having to turn people away from the men's shelter out in my electorate of Liverpool, which joins the member for Werriwa's electorate. For a wealthy country like ours, this should not be happening. For many low-income households in my community, the lack of social rental housing has placed an enormous strain on families who are forced to pay unacceptably high housing costs. This puts these people at risk of homelessness. It is a very real threat for them and their families.
An inadequate supply of affordable rental housing, in particular, has led to an increasing number of households paying more than a third of their income on rent. It is no wonder that my electorate of Fowler, regrettably, topped the nation in terms of rental stress, according to the research done by the University of New South Wales. They found that 44 per cent of households in Fowler are living with rental stress. With the average household income in my electorate just being a little over $60,000, it's little wonder that the great Australian dream of owning a home for most is going to remain just that—a dream. As low- and middle-income households are excluded from home ownership, this will continue to put pressures on the private rental market. Consequently, rent will become increasingly unaffordable for many living from pay check to pay check.
With more families struggling to afford the private rental market, the demand for affordable or social rental housing is clearly outstripping supply. I therefore find it troubling that the newly appointed Assistant Minister for Community Housing, Homelessness and Community—that was his title—in an ABC interview tried to put a positive spin on our growing housing and homelessness crisis. It is at a crisis level. I don't see how we can say anything positive where there are more Australians sleeping rough on the streets and in their cars or forced to stay with friends and family due to a lack of social housing. In 2016, the Census showed that the rate of homelessness is almost five per cent higher than the rate of population growth in this country. There is no denying the fact that homelessness, perpetuated by our severe housing problem, is a critical issue and is one that we, as community representatives, have a responsibility to address.
National Homelessness Week took place when the parliament was sitting last month. It was to raise awareness and highlight the issues faced by people experiencing homelessness and those at risk. In our electorates—I'm referring to the member for Werriwa and myself—the Whitlam Library in Cabramatta established the homelessness hub to provide homeless people and those at risk a safe space where they could access support services, morning tea and some collegiality. In addition to that, for those who are sleeping rough particularly in the winter the Liverpool Neighbourhood Connections, supported by the Liverpool City Council, purchased 114 backpack beds to protect people sleeping on the streets. That is simply a short-term fix. It's a short-term fix for a very broken system.
These initiatives highlight the evident need that we have for concerted action. Every tier of government has a role to play to address homelessness and to reduce its detrimental effects on the lives of people and their families. Everyone deserves to have a roof over their heads. Everyone deserves safety, security, privacy and stability. Everyone deserves to live with dignity and respect. In a developed society like Australia, homelessness should not be on the rise. No amount of positive spin by politicians will be able to mask the reality that we are currently facing in this nation. We are a wealthy nation. It should not be acceptable for any Australian to be sleeping rough. Access to affordable safe, sustainable housing, I would assert, is a basic human right, and there is much more that this government can do to address housing inequity and homelessness, particularly as we have now reached a crisis point.
It's my great honour and pleasure to be speaking about the appropriations and the budget delivered this year by the returned coalition Nationals and Liberal government. It was a major effort: six years of continued discipline and economic tough decisions to bring our budget into surplus. In this budget we have got a $7.1 billion projected surplus and we're on track to deliver that—as opposed to a $55 billion deficit when we assumed the government benches in 2013. And we have done this at the same time as lowering taxes. That is a great achievement.
Around 4.5 million taxpayers will get a low- and middle-income tax offset of $1,080. If there are two of you working in that wage bracket up to $126,000, there's the potential for both of you to be getting that—up to $2,160 in a rebate which you can put aside against your mortgage, across your leasing payments, add to your savings or just household expenses. That lower tax benefit extends to 10 million taxpayers: the middle- and low-income people are the people that needed the most help, and that's why they were the beneficiaries of it.
But our budget also delivers a tax plan out to 2024 that will, in a practical sense, get rid of bracket creep until you get up to earning over $200,000. That is a major long-term plan, but we are delivering in spades already up-front now. If you recall, in last year's budget, we delivered $158 billion worth of tax cuts, and this comes on top of that, and this opposition was promising $375 billion worth of extra taxes.
As a result of having a balanced budget, with lower taxes, it means our commitments to extra spending in health, education and aged care are all being delivered. I'll just go through some of them that are making a huge difference in the Lyne electorate. School funding in non-government schools and government schools across the Lyne electorate is going up. But, as well as that, we have other funds to help schools—the Schools Community Fund and other initiatives for regional students and education access in the tertiary space. We are expanding regional university hubs and centres, and we have plans to deliver one here in the Lyne electorate.
We also have the environment community fund and the Stronger Communities Program. All these funds giving direct assistance to our local communities are a result of having a balanced budget. We can't have these sorts of grant funds without maintaining our fiscal discipline. But the big winners are much bigger than these community based funds. We have the Building Better Regions Fund, which is delivering benefits around regional Australia, and we will have the capacity to have another round of that.
I might just add: aged-care funding—for which I've been fighting for increased services and funding since I was elected into parliament for the Lyne electorate in 2013—in the Lyne electorate has gone up from $90 million per year in recurrent funding to over $135 million in recurrent funding. There are huge capital works underway in aged care. In Forster, GLAICA are developing a massive extension. The plans are drawn up and things are about to kick off. They've already done their seniors living complex. In Wauchope, Bundaleer Care Services are in receipt of an $8.6 million capital grant to extend onto a new site and deliver an aged-care facility specialising in dementia. That will be a $30 million project, courtesy of that $8 million grant from the federal aged-care budget. We also have two new aged-care capital works projects that are going to be rolled out, and this budget and the forward estimates are delivering the funds for that. We've got the Figtrees on the Manning project, which is being started by Bushland Health in Taree. Bushland Health runs many seniors living complexes and aged-care facilities, and they are building a new seniors living and aged-care facility 500 metres from their existing facility in downtown Taree. That is courtesy of an $8.6 million grant as well, for all the public works that have to be done to create this new complex. It's really going to transform the Manning Valley and the Taree economy. We also have on the books a $25 million capital works expansion by the Salvation Army, also in Taree, and the builders have commenced building a brand new 58-bed, state-of-the-art aged-care facility in Gloucester in the middle of the Lyne electorate. We also have cranes in Forster, with an $18 million initial build at the Forster Civic Precinct.
Our budget considerations and management have delivered the funds to make these capital works projects go ahead. It's a massive injection of economic activity when an aged-care facility is built. You have the capital works to start with, which delivers construction employment and fit-out. It delivers services, so there's social benefit. The economic benefit is that all these aged-care facilities require long-term, regular, non-seasonal employment of highly skilled workers. In the Lyne electorate, we have the oldest demographic in the country. This work comes on top of earlier capital works extensions done in the southern part of the electorate.
As I said, this budget has delivered tax cuts not just for low- and middle-income earners—all 10 million of them who are going to get a benefit—but for small businesses, which are the engine room of the economy in our regional electorates. Small businesses that have turnovers of less than $50 million are now paying 27½ per cent company tax. We have increased the instant asset write-off from $25,000 to $30,000. By 2021-22, at the end of this term of government, we'll be getting to the range where, with the tax plan, the small business company tax rate will be dropping down to 25 per cent. With the changes in this last budget extending the threshold up to a turnover of $50 million, 22,000 more businesses will get the benefit of the instant asset write-off and the 27½ per cent company tax rate. We're also making sure that we are getting tax from multinationals that earn money and earn profits in the country, and that has delivered $12 billion into our Treasury.
The other big winner from the Lyne electorate budget is extra roads funding. We've announced $20 million for the Bucketts Way upgrade process, which is a staged process. In my first term of government, we delivered $16.5 million to the Bucketts Way upgrade. This $20 million will go into funds added by the state government and by the local government, the MidCoast Council. And because it links the Pacific Highway with the New England Highway, there's another $5 million from the Roads of Strategic Importance and Heavy Vehicle Safety and Productivity tranche of the infrastructure budget. So we are getting winners across the board.
As well as having the most senior, experienced and wise demographic in the country we have various areas on the coast experiencing rapid growth in population, with young families moving into the area. Schools are expanding. Funding for both government and non-government schools is going up. There is an absolute commitment from this government to deliver the best for every child in Australia. That also extends to our preschool commitment. We are delivering the funds required for every child in the year before school to have 12 hours of preschool in preparation for the start of their formal education.
Not only that, changes were rolled out before the budget—and this budget is funding them. There is an extra $2.7 billion for child care. It all has to be paid for. That's the amazing thing. We have increased spending on child care, preschool, government schools and non-government schools. We have had increases in funding to the states for the hospital system. We've had increased funding for a number of drugs on the PBS. We've started re-indexing Medicare rates. We've got record funding going into bulk-billing. This is at the same time as bringing the budget into surplus.
Part of that is good fiscal management. We have also reduced the number of people who are requiring income support. We have delivered 1.4 million new jobs. The majority of that increase has been in recent months towards full-time employment, not part-time employment, which the other side tends to criticise. The senior end of the working life spectrum has also experienced growth. At the young end of the spectrum we have seen the same phenomenon. We have many programs that have delivered people back into the workplace, such as the Youth Jobs PaTH. All these policies have been rolled out. The Prepare-Trial-Hire initiative has been incredibly successful. We have got young people into jobs.
I mentioned earlier in my speech on this budget our commitment to regional study hubs. They are going forward. There's another round coming up. All that is being funded by good fiscal management. Everything is possible if you can balance your books. We have grown the pie, we have grown the economy, and we have had massive growth in employment over the last six years. We are committed to continuing that. At the same time we have got the lowest proportion of people requiring income support for decades. We've been able to grow the pie and reduce expenditure on income support. The best support we can give unemployed people is getting the economy freed up so that businesses can employ people, and that's what we have been doing.
Just the other day we announced another program for businesses that are modernising their manufacturing capability. Large businesses will be able to apply in a competitive grants round so that they can co-invest in new manufacturing infrastructure. We do have a manufacturing base. We lost a lot of our bulk, cheaper manufacturing jobs over the last 15 or 20 years, but we have seen a growth in smart manufacturing, niche manufacturing, high-value input manufacturing and bespoke manufacturing. It's just a different sort of manufacturing. We have got companies like that in the Lyne electorate that do export. Food Machines makes equipment for many bodies in the US and other overseas countries as well as around this country. We have sporting goods manufacturers in the Manning Valley that provide high-quality, cutting-edge carbon fibre oars to rowers around the world. At the world championships, at national championships and at the Olympics, if you look on the TV screen, about 70 per cent of those oars will be from Croker Oars Australia, made in the beautiful Lyne electorate. And they have been growing as a result of our earlier program, the Regional Jobs and Investment Program on the north coast. All of these things are amazingly possible because we've controlled our finances.
It is a great honour to be the member for Lyne— (Time expired)
Labor supports Appropriation Bill (No. 1) 2019-2020 and the associated bills, as we do not block supply. But I, like many of the Canberrans I represent, am deeply concerned about the future that the Morrison government outlines for Australia in these documents. We are concerned about the way that these bills solidify opportunities for some and forego creating opportunities for all.
We are concerned about the government's lack of a plan to address the critical issues facing Australia that need urgent attention. Where is the government's plan to address the inadequacy of Newstart allowance for recipients trying to pay the bills and find work on less than $40 a day? Where is the plan to address the $1.6 billion underspend in the NDIS because participants are not actually able to access the supports they need? Where is the plan for our economy in response to the increasing body of evidence that indicates it is stagnating? That stagnation is most evident in the pay packets of working Australians, and the government has no plan to address this.
This Abbott-Turnbull-Morrison government is now in its third term. It should have a well-established plan to address the serious issues facing our nation. But, instead, in the Prime Minister's own words, this week's objective was to test Labor—to test Labor on the latest rehash of the Liberal's disgraceful policy to drug-test social security recipients, in spite of all the advice of doctors and other experts that this is a harmful and ineffective policy.
Something that the Morrison government has announced a plan for, though, is the Australian Public Service. That plan is to cut an extra $1.5 billion from it over the next four years. That's what I want to focus on in my speech today. The Australian Public Service is vital to a well-functioning democracy and to delivering services for people all around Australia. We all rely on the APS to deliver services, to keep us safe and to ensure that taxpayers' funds are used as efficiently and effectively as possible.
Public servants are the people struggling to deliver important services at Centrelink and the National Disability Insurance Agency, in spite of being majorly understaffed. They are the people who ensure infant formula is safe, who stop drugs at our borders and who provide early warnings for natural disasters. They are also the people who provide governments with frank and fearless advice, to help them develop the best policies for our nation, and they provide the expertise to ensure that these policies are implemented effectively. Public servants live all around Australia, from Bunbury to Townsville.
Actually, nearly two-thirds of our public servants live outside Canberra. But of course the Public Service has a particularly important place here in my electorate. Housing the Public Service is one of the key reasons our city was established as the capital, and we are proud of the role that our Public Service and our city play in serving the Australian people. In fact, in my electorate 25 per cent of employed people work for the Commonwealth.
In Canberra we are well used to being a punching bag for Liberal governments: job cuts, broken promises and the slashing of resources across the Australian Public Service have been trademarks of the Abbott-Turnbull-Morrison government. In Melbourne, two days prior to the election, the Treasurer and the finance minister revealed what many of my constituents had feared, that a further $1.5 billion would be cut from the Public Service over the next four years. That's $1.5 billion from a Public Service already cut to the bone. The Treasurer and the finance minister waited for the election advertising blackout to begin before going hard on the Public Service, safe in the knowledge that this last-minute announcement would be less likely to hurt Senator Zed Seselja, the Liberal Senator for Canberra, who has consistently neglected the jobs, incomes and services that his constituents rely on.
Unable to do any TV or radio media during the election media blackout, I and my parliamentary colleagues here in Canberra—Senator Katy Gallagher; the member for Bean, David Smith; and the member for Fenner, Andrew Leigh—went hard on social media to tell Canberrans what the Liberals were proposing to do. These cuts will force agencies to scale back important programs like services for veterans, health funding, funding for schools and federal policing, with agencies required to find savings to their budgets of two per cent each year for the next two years, 1.5 per cent in 2021-22 and one per cent in 2023. It builds on this government's appalling record on the Public Service, including 15,000 jobs cut across the service. More than 2,700 jobs have been cut from the Department of Human Services alone, diminishing its ability to deliver services effectively. There have been six years of industrial disputes with their own workforce. There has been a blow-out in spending on external contractors and consultancies. Contracts for temporary personnel services have increased more than fivefold to $1.2 billion. Spending on consultancy contracts has nearly doubled. Nearly $1 billion in taxpayer funds have been awarded to the Great Barrier Reef Foundation and Paladin in questionable processes. And, in an extreme insult to Canberrans, there was the relocation of public agencies to government-held electorates, at significant cost to the taxpayer, and the loss of professional expertise and scientific knowledge.
The Liberal government should respect the unique role and value of the APS to all Australians. Instead of hollowing it out, the Morrison government should invest in the capability of the APS and its people and ensure that it is focused on delivering for the Australian community. The Morrison government's additional efficiency dividend will affect jobs in Canberra and families who rely on these jobs. The Prime Minister regularly talks about Canberra as a bubble, as if no-one lives here or as if the people of Canberra somehow aren't real and aren't living in real families and real communities. These are real jobs; these are real people. They are people who work extremely hard and take great pride in what they do—as they should, because they are serving our nation, ensuring vital services are delivered and that the safety of our community is upheld.
The Prime Minister knows this, but it suits his purposes to dismiss our community as a savings option. He knows the hours that the people in his and other departments work and the quality of advice they provide to him, whether he takes it on board or not. He and his ministers know the professionalism with which public servants throw themselves into the requests they receive from their ministers to provide rigorous advice in a timely manner. The impact that every member in this place should be concerned about is that hundreds of millions of dollars every year for the next four years will be stripped out of delivering services for Australians—services for the constituents of every member and senator in this parliament. The government's efficiency dividend will affect all Australians.
If the efficiency dividends weren't bad enough, since the election, the government and the Prime Minister have continued their attacks on the Public Service and the work that they do. In his address to the Public Service last month, the Prime Minister pointed the finger at the APS for being too focused on high-flying corporate lobbyists in the Qantas Chairman's Lounge or the Ottoman. This is a disgraceful misrepresentation—and, as I said, the Prime Minister knows it. Anyone who has worked in the Public Service, as I have, also knows that you're not having lunches or hanging out in airport lounges, let alone in the Qantas Chairman's Lounge. It is not how public servants operate, and, furthermore, they don't have the time or the money for that sort of thing. I remember well the time that my division at the Treasury decided we didn't have the budget to send a single staff member to a one-day conference at Melbourne university that was central to our work. This criticism is appallingly misplaced from a government that prefers to listen to consulting firms and lobbyists over their own workforce. It is hypocritical in the extreme when we see ministers coming under fire from the National Audit Office over the process for which nearly $1 billion was handed to Paladin and the Great Barrier Reef Foundation.
In his press conference in July, the Prime Minister made some statements about the future of the Public Service that concern me and many of my constituents. The Prime Minister stated:
… the purpose of being here today is to say that when it comes to the public service, that is the engine room through which a government implements its agenda.
… let me explain to you what I mean by implementation. It is the job of the public service to advise you of the challenges that may present to a Government in implementing its agenda. That is the advisory role of the public service.
Indeed, implementation is a key role of the Public Service, and a task that public servants bring vital expertise and dedication to. But the advisory role of the APS is certainly broader than that. The frank and fearless advice and broader expertise of the Public Service is central to well-informed policy and well-functioning democracy. The Australian Public Service is a source of evidence based advice. It is a source of research and a source of sound, world-leading policy thinking.
Despite persistent undermining of their integrity by this government, the Public Service continues to deliver frank and fearless advice to the Prime Minister and his cabinet—the Public Service that serves government diligently and apolitically, no matter what challenges and cuts are thrown their way. Why do they do it? Because, in my experience, public servants are deeply committed to getting the best outcomes for Australia. Public servants want to deliver vital support to the most vulnerable in our community, like social security and disability supports, in a timely and effective manner. They want to keep Australians safe. They want to see the best outcomes for our environment, our schools, our hospitals and health system. They want to see taxpayers' money used in the most efficient and effective ways. As the member for Canberra, I will continue to defend the work they do and give them the respect they deserve.
In addition to the insults felt by my constituents at these comments, they also express fear that there are signals of what is to come—signals that the government wants the Public Service to be even smaller; signals that major changes, like the creation of Services Australia, will be driven by consultants, charging up to $16,000 per day, rather than trusted APS employees working in the public interest; and signals that the government wants to deplete the services it provides. These actions will no doubt impact on the most vulnerable Australians. This is very, very bad news not just for Canberra but for all Australians.
We deserve better than the Treasurer's efficiency dividends and the Prime Minister's vision for a smaller Public Service. Of course, these cuts flow straight through to Canberra's business community. Creating jobs and growing the economy in a place like Canberra is tough when the Morrison government is doing everything it can to prevent these things.
The Barr Labor government in the ACT is doing all it can to fill the gaps with visionary projects like light rail, revitalising our public housing stock and pursuing 100 per cent renewable electricity by 2020. But it can't do it all by itself. So what would I say to the government on this? Stop talking about the Labor Party and get on with governing. And, finally, I say to the public servants who live throughout the ACT: along with my ACT Labor colleagues, I will be your advocate in this place for as long as I am here and for the work that you do.
Thank you very much. I rise to speak on the Appropriation Bill (No. 1) 2019-2020 and to respond to some of the claims made by the government that somehow the economy is going so well. The fact is we've got some major challenges in this country—some structural challenges, economic headwinds—that the government seems to want to either ignore or wish away. The reality is that, regardless of the rhetoric by the Prime Minister or the Treasurer, we have some very challenging times indeed.
I think that if we were to confine ourselves to the facts, rather than the fiction and mythology of the Morrison government, we might then be able to work our way to a solution. To find your way to a solution you have to accept there's a problem. The government has failed to accept that there are significant problems and failed to acknowledge that they have been derelict in dealing with these matters.
This is the seventh year of this government. It's had many iterations. They've been decapitating leaders at a rapid rate, but the fact is that it is the same government with a different leader. It is the seventh year, yet so many of the issues that beset this nation have not been attended to. I can name many: the skills deficiency in the labour market; dealing with reform in, for example, my own portfolio; dealing with research and development investment; tackling the issues that are required; the skills agenda; and making sure that we're responsive to emerging areas of demand in the labour market that are not being attended to. There are so many areas that we have a problem with. Yet you have a Prime Minister and a Treasurer slapping each other's back and doing victory laps while failing the Australian people.
I want to go to some of those facts. First, Australia is experiencing the slowest economic growth since the global financial crisis. Of course, Labor was in power at the time of that economic shock, the greatest economic shock in 70 years, and we responded more quickly and more appropriately than any other developed nation. That has been affirmed many times over. I was the labour minister at a G20 meeting in Moscow in 2013, where it was the unanimous view of the other 19 representatives around the table that Australia had acquitted itself really well because we moved quickly enough and appropriately enough to deal with the massive contraction of private capital. In doing so, we avoided a recession and we saved hundreds of thousands of jobs and thousands and thousands of businesses. We did that, but right now, without the same excuse that one might have had when dealing with the biggest economic shock since the Great Depression, Australia is experiencing its slowest economic growth.
Second, Australia is in its longest per capita recession since the 1982 recession. Mr Deputy Speaker McVeigh, you may recall that that was the recession presided over by Malcolm Fraser—that's how long ago we're talking about—before the election of the Hawke government. We are now in the position of having the longest per capita recession since then, some 37 years ago. Third, Australia became one of the two fastest-growing economies in the OECD under Labor and, indeed, was the eighth-fastest when the government changed hands in 2013. But, under this government, we have dropped to 20th. Think about that. We were one of the two fastest-growing economies during the GFC, but presently we are 20th in the OECD in terms of economic growth. Fourth, living standards have declined under this government, with real household median income lower than it was in 2013. So, since the election of the Abbott-Turnbull-Morrison government, we've seen a significant decline and living standards have fallen.
Fifth, wages have grown at one-eighth the pace of profits other the past year. Now, we're very happy to see profitable companies. That's a good thing; we want to see that. But the failure of this government to attend to the lowest wage growth on record is not only unfair insofar as it affects millions of workers in this country; it is affecting our economy. When you have the lowest wage growth on record, it ultimately leads to falling consumer confidence and falling business confidence, it impacts adversely on aggregate demand and, in effect, you have a consumption problem. Because of that, we have an anaemic economy, and the only thing that seems to be at the disposal of the government or, indeed, the institutions that we have—it is not the government, because the government sits on its hands—is the Reserve Bank, using monetary policy. But increasingly it has less room to move as we continue to cut interest rates. And, of course, the only other institution that's doing anything to mitigate the adverse impacts—
A division having been called in the House of Representatives—
Sitting suspended from 11:43 to 11:55
As I was saying before we were interrupted by the main chamber, the issue of wages is a critical one, and there's not one policy pronouncement by the government to attend to it. Indeed, if you look at the budget forecasts, you can see every budget forecast by this government since its election in 2013 has been wrong—has been overstated—insofar as wage growth is concerned. Wage growth is a problem, and it's not a recent problem. It's been a problem now for years, and there's been no effort by this government to fix that. As I was saying before we suspended, we have had the Reserve Bank seeking to deal with economic problems using its levers. The only other institution that is seeking to attend to this is the Fair Work Commission. To the credit of the Fair Work Commission, and in particular the president, Ian Ross, there have been three consecutive Fair Work Commission decisions on wages that have actually meant real increases in wages. That only affects about a quarter of the employment in this country, yet it does flow through to other areas. But without the Reserve Bank, who, by the way acknowledge the persistent historically low wage growth, and without the Fair Work Commission introducing real wage increases in three consecutive Fair Work decisions, nothing has been done. Certainly nothing has been done in relation to wages by this do-nothing government, and yet they boast about it. That's what's even more galling.
Sixth, productivity has declined every quarter for the last four quarters. So they cannot even claim that they have done anything to arrest the decline in productivity. That's a problem too, because, of course, it is another metric that shows an economy in decline.
Seventh, underemployment is at record highs—1.1 million people in this country are seeking to find more work but are unable to find it. You join that with the unemployment number, we're talking about 1.8 million Australians looking for some work or looking for more work and not being able to find it. I think one of the problems of the government and its economic deficiency is it seems to not understand that the headline unemployment figure is no longer sufficient to show whether the labour market is healthy with respect to unemployment. Because underemployment now is so much a part of the labour market, relying on the idea that the labour market's tightening, because unemployment is at 5.2 per cent is erroneous. It is a foolish and wrong-headed approach. There is so much slack in the labour market, because there are over one million Australians that are looking for more work and are unable to find it, and therefore there is no tightening; there is no tightening, therefore, there is no likelihood of wages going up of their own accord. Yet the government still fails to attend to this problem.
Eighth is that household debt is at a record high of around 190 per cent of disposable income. Ninth is that consumer confidence is down over the year and consumption growth is weak. And I talked about that earlier. When you have low wages growth you have falling consumer confidence, and that affects business confidence. If you look at the trends for consumer and business confidence over the course of the last several years, what you'll see is that, while there might be some peaks and troughs, the underlying long-term trend for consumer confidence is below the long-term average and the long-term trend for business confidence is lower than average. Both metrics underline how anaemic our economy is, and yet the government doesn't recognise it. If you don't recognise the deficiencies or failures in your own economy, then of course it will be harder for the government to prescribe any proper response. Whether it's deliberate, whether it's ignorance or whether it's just incompetence, this government is failing to act on these matters, despite the overwhelming evidence that there are real issues with our economy. The tenth is business investment. As a percentage of GDP, it is at around the lowest levels since the recession of the early 1990s, and business conditions have deteriorated over the past year.
These 10 axiomatic facts go to the point that Labor has been making for some years, and that is that we have an economy that has major challenges, an economy that is having the longest per capita recession since the terrible 1982 depression that many people endured under the Fraser years. Of course, Mr Howard was Treasurer then, as I recall. Household debt is up, business confidence is down and consumer confidence is down. Even employment growth, the one metric the government likes to boast about, pretty much coincides with population growth. That's not to say we don't welcome jobs. We welcome any new job. But let's be very clear: when you've got 1.1 million Australians looking for more work, they might be finding jobs, but they're not finding enough hours in those jobs to pay for things that matter to them. So that's what people are screaming for, that's what they're calling out for: more work in our economy. But, because of the slack in our labour market, there is no likelihood of wages just rising because of the scarcity of labour.
To add to those 10 facts, there is a skill deficit in the labour market. I have been talking to many, many businesses in all sectors of the economy, and they've been talking about the problems of skill shortages in their sectors. Yet, we don't have a tertiary and vocational training system to respond readily and swiftly enough to deal with the emerging demands in the labour market. These are real structural problems and, if this government had been elected in May for the first time, I guess it could have been forgiven for its inability to respond. But this is the seventh year of this government, and yet these matters that have been before it now for years on end have not been attended to. It hasn't even made an attempt to respond to these problems. So for that reason, quite rightly, Labor calls out this government for being unable, incompetent or just indifferent to these challenges. What we need to see is a lot more effort. In my own portfolio, I would hope that the government, after six years and in its third term, would start looking at some form of industry policy to help our small and medium enterprises and even larger businesses.
We would say that one of the reasons the economy is underperforming is that the government has a political strategy but not an economic policy. Think of the future of manufacturing. Incomprehensibly, at a time of great challenges for the global manufacturing industry, the current government has wiped its hands of any responsibility. In fact, it famously goaded a major car manufacturer to leave our shores, and of course they chose to do so the following day. That was a grave mistake, but it exemplifies, I think, the government's ideological predisposition not to help the corporate sector. The government likes to say it is the government for business, but the reality is, when you look at research and development, when you look at investment in skills, when you look at incentives for businesses to invest in research and development, it is left wanting.
In my engagement with business, already in the last few months in my portfolio I have seen significant concerns raised by the business community about the failure of government. I'd have a lot more to say if I had more time, including on issues around small business access to credit and many other issues, but I'm happy to leave that for another time. But this is a do-nothing government. It needs to do more. It is failing the Australian people, doing victory laps, slapping itself on the back and not really attending to its job.
This economy is not working. It's not working for working Australians and it's certainly not working for Australians who need work. It's not working for Australians who get sick, who go to school or who are trying to buy their own home. It's not working for any Australian who has a bank account. Since 2013, on the Liberals' watch, growth has been at its slowest pace in 10 years. Wages have stagnated, and 1.8 million Australians are either out of work or looking for more work. Household debt is high, and living standards are going backwards. The economy is weak and getting weaker, but this Liberal government, it would appear, has no plan to turn things around. This government is operating with a political strategy rather than an economic plan. We need actual action now.
At the end of July, new data was released from the Household, Income and Labor Dynamics in Australia survey that revealed living standards have gone backwards under this Liberal government. Likewise, a recent analysis of Reserve Bank data by Fairfax newspapers reveals the costs of essential goods and services—including hospital visits, property rates and education—have climbed at twice the rate of inflation since the coalition took office in 2013. Since the final quarter of 2013, the overall consumer price index has increased 10.4 per cent, while the costs of government administered or controlled goods and services have jumped 23 per cent. Postal service prices have soared 26.8 per cent. The costs of education rose 24.9 per cent. Childcare costs climbed 26.7 per cent. The costs of medical and hospital services shot up by more than 36 per cent. Over the same period, wages grew by a mere 13.4 per cent.
This was backed by data released by APRA and AlphaBeta in August revealing private health insurance premiums are rising faster than wages and fewer people are taking out private health insurance at all. We are encountering record high out-of-pocket health costs, while waiting times continue to rise under this government. After stating merely weeks ago that problems in the private health sector needed to be reviewed, the Minister for Health has since claimed that the government's plan to tackle issues within private health is already working. 'There's nothing to see here,' says the government. The facts tell a very different story, with people walking away from private health insurance in droves. The entire private health sector needs to be placed under a microscope.
The costs of child care, which is an industry where costs are moderated by the federal government, have climbed 26.7 per cent since 2013. You might have heard media reports suggesting that the Liberal government took credit for a fall in childcare costs following the implementation of its ill-thought-out assistance package in 2018. In fact, the benefits were short-lived, with national figures revealing that, while childcare costs initially fell 2.7 per cent after June 2017, since the September 2017 quarter childcare costs have actually climbed 4.4 per cent. In real terms that's four times the rate of general inflation. Analysis done by my office for the electorate of Burt found evidence that, in the months following implementation of the Liberal subsidy last year, costs had gone up. Cash-strapped parents in Perth's south-eastern suburbs on average were forced to fork out up to 13 per cent more for child care than they were the previous year. We heard examples of fees going up by $115 a week since April 2018, whilst one centre increased their daily rates by a whopping $36.
This government has no economic policy to boost growth, wages or living standards. Australians are worried about their wages, their job security and the overall economy. The economy is clearly floundering. Wages and living standards have stagnated or are going backwards, and the Liberals clearly have no plan to turn things around. Westpac senior economist Justin Smirk told Fairfax newspapers there was a real risk that wage growth, which the bank believes will grow by just 2.5 per cent in the coming year, might start slowing even further the following year. He went on to say:
… given how well contained the wage inflation is across the nation, and between sectors, even this modest increase looks optimistic with the risks to this forecast more to the downside than upside.
The latest labour force figures released by the Australian Bureau of Statistics have served to reinforce that the economy is showing a severe case of the wobbles. Statistically, we are at a point where the percentage of adults in employment is as high as it was prior to the GFC. In June 2008, 62.9 per cent of all adults were employed compared to 62.6 per cent now. This, in real terms, means that, while the percentage of people employed is nearly back to our pre-GFC levels, the average hours worked each month by the adult population is now five per cent lower.
The drop in growth of hours worked is a serious concern, especially given it means underemployment is unlikely to improve any time soon. In July the national trend underemployment rate was 3.8 per cent and falling. In August it was 8.4. Overall, the growth in the hours worked has collapsed. The Prime Minister, the Treasurer and the Minister for Employment, Skills, Small and Family Business claim to have created 1.2 million jobs since they came to office. However, the real-time information tells us those jobs were an assortment of full-time, part-time and casual placements. People are still not working the hours they want or need to get ahead.
Global economic developments are concerning. However, this relatively recent volatility in the market does not explain Australia's overall dismal economic performance. The Prime Minister and the Treasurer are clearly in denial about the weakness in the domestic economy. That's why they've got no plan to turn things around. Last month the RBA downgraded the economic growth forecast for this year from 2¾ per cent to a below trend 2.5 per cent. These downgrades should be a wake-up call for the Morrison government. The Reserve Bank implementing the lowest interest rates in history this year is not enough to make up for the Liberals' economic mismanagement. They can't be responsible for doing all of the heavy lifting.
Recently, the Reserve Bank governor emphasised to the House of Representatives Standing Committee on Economics that monetary policy is not the country's only option. Monetary policy certainly can help, and it is helping, but there are downsides from relying too much on monetary policy. One option is fiscal support, including through spending on infrastructure. Labor has been calling for the government to bring forward responsible spending to stimulate the economy, including bringing forward spending on infrastructure. Following last week's revelations of the economy slumping to its slowest rate of growth since the global financial crisis, there were media reports that the Prime Minister was calling on state premiers to fast-track the infrastructure spend. He backed that up in a speech to Master Builders yesterday. It turns out that the Prime Minister listens to us sometimes.
In this economically turbulent time, faith in our banks and financial system must also be restored. It is possible for this to be done without jeopardising any surplus. Unfortunately, the six months of inaction on the recommendations of Commissioner Hayne of the banking royal commission means that faith in our financial sector remains at an exceptionally low level. In August the Treasurer released an overdue implementation timetable that won't see many fast-tracked recommendations implemented for another 15 months, almost two years after the final report. On banking misconduct, this government has been shamed into action by the public, the media and the Labor Party.
A number of recommendations that were made by Commissioner Hayne could have been written into law by now. In fact, they could have been written into law prior to the federal election. In many cases, these were simple tweaks to existing legislation that would have made obvious positive changes for consumers who may otherwise be subject to further misconduct by banks and financial institutions. Labor was willing to approach this in a bipartisan manner to work with the government to push through these legislation changes as quickly as possible. That offer was never taken up. As a result, this delay means that consumers, as well as banks and financial institutions, have been left waiting in the wind on any sort of certainty about what the sector will look like in the years ahead.
The Liberals and the Nationals must stop playing political games here in Canberra and instead focus on delivering action for victims of banking misconduct and for all Australians. This government is putting the banks before the people—just like they did when they voted against a banking royal commission 26 times.
Australians need and expect a plan from this government to get the economy going again. GDP per capita has gone backwards over the year and, for the first time since the global financial crisis, we don't have the time for the finger-pointing and blame-shifting that has come from this government. The government seems to forget that it is the government and it is its job to present and implement an actual plan. It's time this government presented us with an economic program that will support the floundering economy and safeguard us all from global risks. This should be above politics. This is about backing the Australian people.
Finally, while what I have said is about our nation, I cannot pass up the opportunity to comment on the real-world practical impacts of the government's lack of action on the economy for the people of Perth's south-east in the electorate of Burt. In our suburbs and communities, we experience the benefits of economic upswings last and the detriments of the downswings first. This means our economic suffering is longer and is reflected in our already high and persistent unemployment rates, our even higher youth unemployment rates, our high welfare dependency, our high public housing reliance and our high crime rates.
Many in our community have negative equity in their home and are struggling with repayments. It's up to this government to show some leadership and come up with a real plan for our economy. It is the role of government to use the policy levers at its disposal to drive national prosperity for everyone, to ensure all members of our community are not left behind. There are very real world consequences; actual people are very negatively affected when governments don't take action. This isn't about economic indicators and statistics. The government must act. The time for action is now. The people of Perth's south-east in Burt, and the people of communities like it around the country, are going backwards under this government and they won't forget it.
I rise to also speak in support of the appropriations bills. As other members in this chamber have noted, since 1975, Labor has taken a principled position in terms of supply. Governments are entitled to supply and to function effectively with distribution of revenue. Within that frame I note that these bills do include some expenditure that is supported by the opposition. In an era where constituents in my electorate of Bean are looking for some level of consensus, I'm happy to acknowledge that the Department of Agriculture receiving $295 million for concessional loans to farm businesses, including those affected by drought or the North Queensland flood, is a good thing. I'm happy to acknowledge that, despite the proliferation of contracting arrangements that undermine the department's capacity, it is good that Defence will receive funding to protect and advance Australia's strategic interests, to support ongoing major defence operations and to support our veterans. It is good that we're investing in programs to prevent violence against women and their children and to establish the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability. And, although late to the table, I welcome seeing the bills containing funding for the continuation of the Corporate Tax Avoidance Taskforce. That said, let's call this third government out for what it is: a government without a plan—not even 'a cunning plan' as Baldrick would have.
It's a government without compassion and a government without a vision for Canberra and its residents who live in the Bean electorate. These bills highlight again how out of touch this third-term government is. We see cuts to the Public Service and the impact of these cuts on local communities, let alone public sector capability. We see the ongoing impact of the debacle that is the forced relocation of the Australian Pesticides and Veterinary Medicines Authority. We see the continued flawed rollout of the NBN into the Bean electorate—a matter regularly raised with my office. We see underinvestment in health services and mental health services. We see a lack of investment in transport infrastructure. We see a lack of investment and vision for the National Capital Authority. We see a lack of action in terms of a response to the inquiry into our national cultural institutions—institutions that are still struggling under an uncompromising and misinformed efficiency dividend. Finally, we see the inadequate level of the Newstart support payment.
In the third term of this Liberal and National government, it is clear, as clear as a Canberra winter's day, that when it comes to the economy this government only has slogans. And it's difficult to get beyond slogans if you're not prepared to invest in the capability and capacity of your own workforce. Nowhere is this more apparent than in two contrasting speeches on the public service over the last couple of weeks. Andrew Podger, the former Australian public service commissioner started from first principles, restating the statutory object of having 'an apolitical public service that is efficient and effective in serving the government, the Parliament and the Australian public'. This purpose was reinforced by the High Court decision in the recent Banerji case.
Podger goes on to comment that issues identified in the 2010 Moran review have not only not been resolved but have got considerably worse. Capability deficits have grown and the 'Reliance on contractors and consultants has increased with highly doubtful … gains in value for money … and continued negative impacts on APS capabilities.' Repeated expert advice on the inappropriateness of crude efficiency dividends has been ignored and a remuneration policy across the sector is a mess.
This contrasts sharply with a speech made by the Prime Minister to the Institute of Public Administration. The Prime Minister talked about providing guideposts for the public service so that the APS can have a better understanding of how the APS can support the government and the nation. These guideposts are little more than inane catchphrases from a reserve-grade locker room: respect and expect; it's about the implementation; look at the scorecard; look beyond the bubble—a particular Canberra favourite; read the game and stay ahead of the play; and honour the code. They read and sound like the outtakes from a meeting run by David Brent at Wernham Hogg. Probably enough has been said about the Canberra bubble—suffice to say that it is farcical for resident No. 1 of the bubble to lecture working Australians to look beyond the bubble. A little self-reflection wouldn't hurt.
The Prime Minister then went on to attempt to narrow the scope of the public service by suggesting that the public service should have a 'laser-like focus on serving the quiet Australians' rather than all Australians. Anyone like me, a child of the seventies, would know that the quiet Australian, of course, is BHP. Perhaps this is the government's way of saying we should be servicing multinationals better.
Of course this is not only a convenient way of justifying doing little as, by their nature, quiet Australians won't necessarily tell you what they want or don't want, but it's also a way of shutting down dissent and directing the work of the public service away from those Australians that are the most vulnerable and in need.
Telling public servants that they need to honour the code is laughable when not only are public servants already bound by codes of conduct—codes of conduct that don't apply to the armies of contractors and consultants that outnumber them—but former ministers may have actually complied with codes of conduct but it would be difficult to argue that they have honoured them. It's even more difficult to argue that the member for Hume—
A division having been called in the House of Representatives—
Sitting suspended from 12:23 to 12:36
As I was saying, it is even more difficult to argue that the member for Hume has honoured such a code. 'Leading by example' is a catchphrase missing in his speech.
One of the elephants in the room at the institute speech, not that it appeared to be seen, was the absence of consideration of the cost and consequences of spending billions of dollars on consultants, contractors and labour hire to provide public service policy and delivery in order to effectively assist the government of the day in meeting the challenges faced by the nation. A workforce driven by commercial interests, rather than public good, conflicts directly with the objects of the Public Service Act. It erodes expertise and capability within government, putting the interests of multinationals before the Australian people.
The challenges we face are clear and they impact the lives of all who live in Bean. The economy is floundering, many families are struggling, and the Morrison government doesn't have a plan to turn things around. The Australian economy is growing at its slowest pace since the GFC, with annual growth deteriorating further, to be half what it was one year ago. Annual GDP growth is weaker than the forecast of both the RBA and the government itself.
Let's look at the economic record of those opposite. Under the watch of the Liberals and Nationals we have debt of more than half a trillion dollars. This government has doubled our national debt. Remember, this from the people who gave us the catchphrase 'debt and deficit disaster'. Growth is just half a per cent for the June quarter and has slowed further to 1.4 per cent for the year. For the first time since the GFC, GDP per capita has gone backwards over the year and annual GDP growth is lower than population growth. The national economy has gone from the 8th fastest growing economy in the OECD, when Labor was in government, to a sickly 20th. Wages are growing at only one-sixth the pace of the profits. Productivity, or GDP per hour worked, has gone backwards over the year. Household spending remains weak. The news is all good. Total private business investment went backwards in the quarter and over the year. As a percentage of nominal GDP, it is around its lowest level since the early 1990s recession.
Long-term unemployment remains high and has continued to grow since the Liberal-National government was elected. Underemployment remains at a high rate—estimated now to be around nine per cent. Retail sales are trending down. This government's record locally is further highlighted by the data in the HILDA report released in July. It showed that living standards have gone backwards under the Liberal-National government, and, as has been pointed out before, it shows that people are actually earning less now in real terms than they were in 2013, when this government was elected.
The HILDA report showed significant falls right here in the ACT in median household incomes, adjusting for household size. In fact, the drop of 11 per cent was the largest of any region in Australia. This was a direct consequence of the decimation of the Public Service and the cuts in real wages for many hardworking Canberra public servants and their families. This current economic situation is an indictment of this third-term government and the Liberal representation of the ACT in this government. After six years of this government, the Prime Minister shouldn't just dismiss these longstanding homegrown weaknesses. We know that his home affairs minister is distracted, off making rather odd and, some would say, laughable music videos, but the Prime Minister shouldn't be. The RBA is already doing the heavy lifting, having cut the cash rate to one-third of the emergency lows seen during the GFC.
After two postelection rate cuts, the third-term Liberal-National government has no plan for growth. This nation and my electorate need a plan for investing in skills, a plan for investing in high-quality education, a plan for investing in science and research and a plan for investing in Australian jobs. The people in my electorate of Bean need a government that's prepared to invest in local infrastructure, a government that's prepared to invest in education and skills to make sure that the young people in the electorate of Bean have the opportunity of a world-class education, a government that is prepared to invest in a strong, apolitical public service, not one continually undermined and compromised by the unfettered growth in contracting, consulting and outsourcing.
This government likes to pretend that it's doing a good job of managing the economy, but, as I've outlined, the facts tell a much different story. Our labour spokesperson, Jim Chalmers, has said that Labor supports these appropriation bills, but we don't support the approach of the Prime Minister and his Treasurer. I agree, and he is right in calling on the third-term Liberal-National government to bring forward a budget update so their forecast can be adjusted and they can responsibly fund a proper and broad economic plan to get the economy moving again. We're not the only ones calling for a plan, or at least some further action. The Reserve Bank governor, no less, has called for more infrastructure investment sooner. Menzies would be proud of this government's inertia on the economy. They are asleep at the wheel with no plan. Without insulting every C-grade golfer—and I am one—those opposite are the Sunday hackers of economic stewardship. They are deep in the rough and they have no plan to get back on the fairway—a fairway, I might add, that was laid down by Labor governments past.
The government's lack of plan also extends to many other areas, from education and skills to the NDIS. I'm on the record in calling on this third-term government to also invest in increasing the Newstart payment—not purely because of the toll it takes on people living on such a low payment; it makes sense economically. We need to get consumer spending moving, and this would help drive that forward. Rather than undermining the dignity of Australians by suggesting we should drug test them, I suggest the government invest instead in giving them a fair go to get back on their feet.
When it comes to vocational education, the Liberals have presided over a crisis in the sector. Vocational education has been attacked day after day by privatisation, poor regulation and unhealthy competition among dodgy providers gouging the system. Since coming to office, this government has cut $3.6 billion from our vocational education and training sector. A consequence of this has been that traineeships and apprenticeships have more than halved at a time when we should be skilling our nation. We need a world-class schools and education sector where no child is left behind and where we are educating the next generation for the jobs and skills of the future. Not only do the students and teachers in these schools need this investment; we need it for the economic growth it will bring.
Whilst, no doubt, the NDIS has been a landmark Labor initiative, it has been neglected by three Liberal governments. It's not an exaggeration to say that the ideology that has driven the decision to place a staffing cap on the NDIA has been catastrophic and creates systemic problems so significant that we now have a delivery model unable to provide for all people in need of support in Bean and other electorates around the country.
In short, we are still waiting for a government reply into a report on the opportunities presented to our regional economy here by our magnificent cultural institutions. We also have a National Capital Authority that is doing what it can with what it has but can't keep the ponds out the front of Old Parliament House operational. We've individuals across the electorate being wrongly hassled through robo-debt letters. We have members of the coalition trying to undermine superannuation increases and to even have superannuation not apply to low-income Australians. We have the ever-expanding use of contractors, driven by the departmentwide staff cap. This is a third-term government without any decent level of planning. It does not even have a cunning plan like Baldrick so often had.
I rise today on a matter of great importance to my home state of Queensland in the best country in the world and the greatest nation on earth—that is, the fate of the NRL grand final in 2021. We are all still reeling over the decision for the 2020 grand final to go to the Sydney Cricket Ground, a decision that could modestly be described as a travesty. Now we hear that the fate of the 2021 grand final is at stake because delays and mismanagement of the New South Wales government mean that the stadium will not be ready in time. This is a disaster, but it's one that Queenslanders are here to help with.
We should bring the NRL 2021 grand final to Suncorp Stadium, the spiritual home of rugby league, because if you want something done right, you should give it to Queenslanders. I posit that the only reason southern teams don't want this is cowardice. If you think that you can win it only when you play at home then I ask the question: have you ever truly won it? I call upon New South Wales to relinquish their hold on the 2021 grand final and send it to the spiritual home of rugby league, Suncorp Stadium.
I also rise today to speak about the lethargy of this budget in addressing the significant policy challenges of our coming generations. Economic growth has been slow for a decade, Australia's population is ageing and climate change looms. The burden of these changes falls mainly on the young. Young people face real concerns about housing affordability, stagnating wealth and incomes, and future budget pressures. It is a wonderfully conservative idea to carry on about the Left redistributing wealth when they themselves actively seek to redistribute it in the other direction.
Under neoliberal policies of deregulation, privatisation and austerity, our living standards have declined sharply. People have lost jobs. People have lost benefits. People have lost much of the safety net that used to make these losses less frightening. They see a future for their kids that looks even more foreboding than their precarious present.
Millennials are earning, when you adjust for inflation, about 20 per cent less than our parents did at the same age. Younger Australians are much less likely to own a home than their parents were at the same age. Homeownership rates for 30-year-olds fell from 65 per cent in 1981 to 45 per cent in 2016. The wealth of households under 35 has barely moved since 2004. Poorer younger Australians have gone even further backwards. Youth unemployment is around double the national average, and in my home state of Queensland it is as high as 25 per cent in the regions.
This week the Grattan Institute has confirmed with fresh figures that the cost of housing is contributing to the rising gap between rich and poor. It is making the gap between disposable household incomes bigger. It is making the gap between net household wealth bigger. And it's making the gap between any prosperity in our prospective futures much bigger.
Amid this growing inequality we have witnessed the rise of the Davos class—a hyperconnected network of banking, tech and media billionaires, elected leaders who are cosy with those interests, and influencer celebrities who make the whole palaver seem unbearably glamorous. For too many Australians, success is a party to which they are not invited. They know in their hearts that this rising wealth and power is linked to their growing debts and powerlessness.
So that's the problem. That is the storm of circumstances which this budget stood to address and those are the circumstances that formed the landscape upon which the election was fought. Where did we land? A budget where mincing management triumphed over reform, and an election where fear triumphed over hope. The coalition called Labor's reform agenda an age war and stoked retiree anger directed at policies designed to address intergenerational inequality. They did other things too.
It would be wrong to allow intergenerational inequality to be pushed off the agenda on the basis of the election result. Progress does not move in a straight line; it zigs and zags. The concerns faced by young Australians are real, and they will remain. As we stand here in the new term of the parliament of 2019, these problems loom as some of the largest unaddressed policy voids in our country, affecting our largest generation.
As I said in my first speech, this year is remarkable because it is the first year where more Australians are born after 1980 than before. It's such a bold statistic that I usually have to say it twice: there are now more Australians born after 1980 than before. Millennials are also older than you realise. The oldest millennials are already pushing 40. The youngest are out of high school or even out of uni, depending on where you draw the birth line.
What we all have in common is that we all came of age in the shadow of the global financial crisis. Economists can tell us what happened to previous generations who came of age in recessions. The generation that came of age during the Great Depression endured a protracted period of economic stagnation that prevented them from finding their economic feet. But that was followed by a period of jump-started economic growth that lasted for the second half of their working lives in the 1950s and 1960s. They had an opportunity to catch up. Where is that boom for millennials going to come from? Not this year's budget.
I've got quite a few problems with this year's budget, but in order to stay tightly relevant to millennials today I am going to speak about just two: the failures to address rising inequality with respect to housing and wages. During the Howard government years, policies were introduced that put the cost of owning a home out of reach for an entire generation in major capital cities. The Howard government introduced capital gains tax concessions leading Australians to shift their wealth into property investment at a far higher rate than the vast majority of the rest of the world. The concept of million-dollar homes was until very recently seen as the top echelon of housing. Now it is the median price in the largest city in Australia. Housing prices have increased from four times the median income in the nineties to seven times the median income now. It's eight times in Sydney.
Housing markets are crucial to the divided fortunes of the younger and older generations. At the height of the property boom, the average capital gain for a regular house in Sydney was higher than the average annual earnings. In other words, for a lot of workers, their houses earned more than they did. High house prices make it substantially harder for young people to save for a deposit. There is a lot of chat getting around about smashed avocadoes, but the truth is that if millennials dialled back the avocado toast to spend only what our parents spent on eating out, it would still take between 100 and 113 years to save a twenty per cent deposit on the median home, depending on where you are. Brunch has become a convenient scapegoat for structural inequality.
So what's the government's plan? There were no new measures in the budget this year for first home buyers or owners. None. We will only overcome this policy paralysis when we are brave enough to challenge the cognitive dissonance that characterises our national thinking: we want house prices to continue to rise at the same time that we want young people to get a foot on the housing ladder. The figure lying at the heart of this dynamic is $8 billion per year—the annual subsidy the federal government now provides to the private housing market. As federal representatives, we owe any annual funding commitment of $8 billion per year the provision of our scrutiny. We should assure ourselves that there is no better way the budget can spend this money to improve housing affordability for all Australians.
Concerning wages growth, the assumptions made by the government in this budget are wildly flattering. The government would have us believe that the labour market will stay as it is now, but our employers will all want to pay us more. In reality, economic pressures on young people have been exacerbated by wage stagnation and rising underemployment. If this is the new normal, we will bear witness to a new generation moving through adulthood with lower incomes than the generations before it.
Three backbench Liberal MPs wrote that the government's foreshadowed IR reforms would boost productivity, create more good jobs, lift wages and boost international competitiveness—all at once. Everyone will have 'control over their destiny'. To me, it looks like people throwing away the umbrella in a rainstorm because they themselves aren't getting wet. Conservatives and business lobbyists claim the current system is union dominated, but union membership, union activity and enterprise agreement coverage have all declined dramatically. Where unions are absent, wage theft and the erosion of employee protections are rife, and ethical businesses that comply with the law are placed at a competitive disadvantage.
The problem has not been an absence of productivity growth; our productivity can be always improved. But real wages are already far behind what productivity growth is occurring. The bigger problem is the failure to share the benefits of productivity growth. International evidence is clear that stronger worker rights and collective bargaining also tend to result in a better distribution of income, both among workers and between workers and firms. In other words, better worker rights lead to a larger economic pie that gets more evenly distributed. We could look to Germany, Sweden, the Netherlands and Japan—places where collective bargaining is accepted and even nurtured as a healthy, positive economic feature. Countries with more collaborative and balanced IR systems are eating our lunch in international competition, as my old bosses used to say. The solution to that challenge cannot be to suppress wages even further or disempower and fragment workers even more.
Generation-on-generation progress in living standards has been the happy dividend of Australia's strong economic performance since the Second World War. On average—and I will address intergenerational inequality at another opportunity—children could expect to be substantially healthier, wealthier and better housed than their parents at the same age. This generational progress can no longer be taken for granted. Our Australian covenant of trust that one generation will look after the next stands to fall. Every generation faces its unique challenges, but letting this generation fall behind the others would surely be a legacy that none of us would be proud of.
These fundamental questions should be addressed by any federal budget, and they weren't. In this new parliamentary term it is dispiriting to witness a government acting like the dogs who caught the car rather than getting down to work on these problems. Many Australians have rage fatigue and moral exhaustion from the election and from watching the state of affairs abroad in Trump's America and in the mess of Brexit. It hurts to see the young and the vulnerable in a vice grip and to see the things that we have fought for sabotaged. Most days, I am approached by someone who feels dismayed at what has become of us.
In my first speech I spoke about being galvanised through the resistance. But I want to spend these last moments here talking about what it means to be the opposition. You oppose something by standing up to it but also by being its opposite. It means being compassionate and inclusive where they are cold and exclusionary. It means being committed to accuracy and precision where they are sloppy with the truth and the facts or, when it comes to climate change, at total war with them. It also means preserving your greatest effort for the true battles over the course of our future—battles like this one—and preserving the memory of how people before us have opposed and resisted and won.
Progress does not move in a straight line. It zigs and zags. We do not have every answer. In this global climate of rising inequality, there are questions not yet asked waiting for us in the near recesses of the future. What our constituents ask of us is that they can know what to expect of us in the face of future dilemmas that no-one anticipates yet. Here is where I stand. Intergenerational inequality is immoral, and it is a crisis looming upon our nation. I'm restless with the task of solutions not yet started.