House debates

Monday, 21 November 2022

Private Members' Business

Economy

4:45 pm

Keith Wolahan (Menzies, Liberal Party) Share this | | Hansard source

I move:

That this House:

(1) notes that:

(a) the previous Government's economic plan, implemented following the impacts of the COVID-19 pandemic, left Australia in a better economic position than almost any other advanced economy; and

(b) the 2022-23 budget was an opportunity for the current Government to build on this strong position and address the cost-of-living crisis; and

(2) acknowledges that:

(a) on every measure, this Government has failed in its task to deliver for everyday Australians, through their budget with:

(i) the cost-of-living continuing to rise;

(ii) electricity and gas bills predicted to soar by 56 per cent over the next two years;

(iii) wages for Australian workers forecast to go backwards;

(iv) unemployment projected to grow; and

(v) tax increases; and

(b) Australians are being hampered by a new Government with no economic plan for the future.

In the pandemic years—I note, with many colleagues now testing positive, we're probably still in them—Australians faced an unprecedented challenge, particularly when COVID first came. Lockdowns, border closures, trade blockages—this was a time of uncertainty and grave risk. Our institutions were stress tested; our social fabric stretched thin. So many Australians were left wondering what tomorrow might bring. Were they to have a job? Was their business, particularly if it was a small business, to last?

In the face of this challenge, a Liberal government did act. A Liberal government delivered transformative stimulus spending under the JobKeeper and JobSeeker programs. A Liberal government unwound the fuel excise. We did what needed to be done at the time. Under a Liberal government of the cash rate remained stable and unemployment reached record lows. Ideology was put aside and action was taken.

This motion is about the new government. The challenge the new government inherited was clear. In the post-pandemic age, stewarding the nation's finances means fiscal discipline. It means shouldering the burden for tackling inflation. It means honouring commitments to keep cost of living low. By each metric this government is not doing well, and in some it has failed. I'd like to consider them in turn.

Inflation drives up bills, it wipes off savings, it steals from progress. Today it sits at 7.3 per cent, the highest annual inflationary figure in more than three decades. What does the government do? Nothing to shorten the path to balancing the books. It is the old story of reckless spending. What does this mean for Australian families? Stephen Koukoulas, Julia Gillard's former economic advisor—certainly not in team blue—has stated as much: here is a government that has left the RBA with all of the work 'carrying the can in getting this inflation rate lower'.

When Labor shirks responsibility, families suffer. The rates will go up and mortgage payments will increase. Already a family on a $750,000 mortgage will pay an extra $1,200 per month compared with May this year. The pain does not end there. Goldman Sachs has forecast the possibility of a fivefold increase in the interest rate, and Goldman Sachs is not alone. The RBA, ANZ and Commonwealth Bank have all forecast end-of-year inflation higher than the budgetary forecasts. The Prime Minister promised the Australian people cheaper mortgages. No fine prints, no conditions—a simple promise. What we got instead is record price increases.

It could have been so very different. Supply-side reform is an option available to the government. A technology-friendly agenda is an option. Sustainable wage growth accompanies those. Productivity was supposed to be the name of the game. We were promised a 21st century economy. What we instead got was a 20th century enterprise bargaining code. Instead, the great trend of liberalisation was arrested. Instead of agility and dynamic, forward-looking thinking on the economy, we have returned to centralised wage fixing.

The Labor Party's industrial relations bill has invited the ire of every representative body for business. It is bad policy. It is anti-productivity, but it is also, sadly, predictable. The bill confirms what many Australians already suspected: that this is not a responsible, progressive, forward-thinking government but the mere political arm of its union paymasters. Empty promises. Missed opportunities. But this government is not done waging a war on productivity. Stage 3 tax cuts are now on the chopping block. These cuts were legislated. These cuts were part of your personal income tax plan. (Time expired)

Photo of Lisa ChestersLisa Chesters (Bendigo, Australian Labor Party) Share this | | Hansard source

Is there a seconder for the motion?

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | | Hansard source

I second the motion and reserve my right to speak, after my fine friend over here.

4:50 pm

Photo of Julian HillJulian Hill (Bruce, Australian Labor Party) Share this | | Hansard source

This is very strange, isn't it? It's difficult to know what the chamber is expected to make of this motion. The member opposite has been here for a few months now, and they talk of him as a future Prime Minister. Quietly, they talk of him as a future Prime Minister, possibly the next Liberal Prime Minister.

An opposition member: Hear, hear!

Why, you might ask? Well, he can talk in full sentences—the bar's pretty low! He doesn't seem too extreme, as we heard from his measured, reasonable, statesmanlike tone. He impersonates a normal person. But then he goes and does something really weird like this. He moves a motion, bringing on a debate, praising the Morrison government's economic management. I mean, seriously? It's been six months since the election, and we get the shock-horror routine: wages are too low; electricity and gas costs are too high; the cost of living is out of control. Well, I'll give a tip to the new member, the future Prime Minister, over there: a big advantage he has in his quest is that he was not a member of the Abbott-Turnbull-Morrison circus. Own that. Don't be doing silly things, moving motions trying to defend their incompetence.

I should say sorry, also, for tagging you as a future Prime Minister, because Josh Frydenberg was a future Prime Minister. What happened to Josh? Where'd he go! Dave Sharma, my friend Dave, was a future Prime Minister. He lasted a term. Tim Wilson was a future Prime Minister—according to Tim Wilson!—so it's a dangerous moniker to own.

But, seriously, this is ridiculous. If the Liberals' record of economic management is success, I'd hate to see failure, Member for Menzies. We have a trillion dollars of Liberal debt with no economic dividend to show for it. Perhaps the biggest slur that you could make at a government facing a crisis is, 'They let a good crisis go to waste.' Yes, as you said, the former government spent money on JobKeeper, and $20 billion of JobKeeper—now in the national debt for the next generation to repay—was paid to companies to increase their profits. Well done, Liberal Party!

The economic record that the Liberals left after a decade in office was falling real wages, and they can't hide behind COVID. If you look at the OECD, wages were falling even before COVID. The Liberal record before COVID was 0.7 per cent negative wage growth, the third-lowest in the OECD. It was the worst decade for productivity growth in 50 years. In 2013, when Labor left office, we were 10th highest in the OECD. By the end of the Liberals, before COVID, in 2018, we were negative on productivity growth and fifth last in the OECD. They turn around and they hate these facts, but they're facts from the Parliamentary Library. That's the Liberals' economic record even before we got to COVID.

They covered up power price rises before the election. They actually changed the law to hide the truth of what was coming down the pipe after 23 energy policies they had over a decade—and they couldn't agree on one of them. They failed to invest in skills to prepare the economy for this moment. Who knew? You cut $3 billion from TAFE and trash the apprenticeships system, and then you get an economic spurt and there's no apprentices and no-one with skills, and employers are screaming out for migrants. We had a decade of wasted opportunities and warped priorities.

The Nationals leader said that the budget position that the former government left was a gift to the nation. Nearly $1 trillion of Liberal debt—that's a gift? I'd hate to get his Kris Kringle! The government's budget delivers on our election commitments: responsible cost-of-living relief without putting upward pressure on inflation; cheaper medicines, cheaper child care and more affordable housing; and beginning the hard yards, the long, hard road ahead, of budget repair.

I was told by the contribution of the member for Menzies that the government was engaged in 'reckless spending'—straight from the talking points of Liberal Party propaganda they read out on Sky News. It's reckless spending, apparently. Well, adult government is back. Let's deal in facts. Unlike the Liberals and the Nationals, we did not spend the record commodity income boom in this budget. Yes, the terms of trade have improved. Yes, there's money flowing into the budget for the next couple of years from commodities. We spent one per cent of that. That's a fact—a Parliamentary Budget Office fact. We should deal in facts. What did the Morrison government spend? 60 per cent of the commodity boom revenue that came in. What did John Howard spend—that great hero who baked in the middle-class welfare, the structural budget deficit? It all stems from Howard's days. He spent 70 per cent of the commodity boom. Let's be very clear. If this government behaved like the former government in its budget, we would have 1.4 per cent higher interest rates. If that's the record that you're promoting, I suggest you try again and get a better motion.

4:55 pm

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | | Hansard source

I very solidly and earnestly and stridently support this motion put forward by the member for Menzies. The member for Bruce has just given us a five-minute dissertation and asked a few questions. There were no facts—I say this as he scurries out of the Federation Chamber—about his trillion-dollar debt claim. It is not $1 trillion of debt. It is nowhere near $1 trillion of debt. But we keep hearing it. We hear it from the Prime Minister. We hear it from the Treasurer. We just heard it from the member for Bruce.

We get asked: what have we got in return for the debt that has been incurred? I'll tell you what we have. We have many tens of thousands of Australians alive today because of the investment that we placed in making sure that during the COVID pandemic we kept Australians as safe as we could, as alive as we possibly could. Indeed, the member for Bruce mentioned JobKeeper, through which 700,000 jobs were saved. What was the alternative? We hear repeatedly members opposite talking about $1 trillion worth of debt and asking, 'What have we got in return?'

Government Member:

A government member interjecting

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | | Hansard source

I was in those meetings where we were faced with the prospect—the Chief Medical Officer, Dr Brendan Murphy said—that we could potentially lose tens of thousands of Australians within months, if not weeks. I was there when we were very worried about the prospect of having businesses close their doors not just for the downturn but, potentially, permanently. We put in place urgent and necessary and responsible measures to make sure that we kept the doors of business open, that we kept the economy going and, most importantly, that we kept Australians alive.

But we didn't just stop there. We also kept vaccines getting out to Pacific island nations. We played our part as a good neighbour should. We played our part in making sure that, indeed, we kept homes being built through the construction industry, through HomeBuilder. I heard the member opposite talking about wages. We have the highest minimum wage in the world, and that's a fact that not a lot of those opposite often espouse. We should be extolling the virtues of that. We are very lucky.

A lucky country isn't just there by good luck; it's there by good management. For nine years, this country was under very good management under the successive Abbott-Turnbull-Morrison governments. Just have a look at what three years of getting it done did. We had 815,600 female business operators and 220,000 trade apprentices. It was a record high. Indeed, 71.3 per cent of trade and exports were covered by free trade agreements. When we got into government, that percentage was in the 20s. It was very low. What we made sure of was the fact that we were getting our trade, all of those wonderful agricultural and resource exports, to the world. Australia was very much open for business after years of neglect by those opposite when Labor was last in power. Electricity bills went down eight per cent in the past two years, but what do we hear from those opposite? We hear 97 promises leading up to the election of power bills going to be reduced by up to $275. I wonder when that's going to happen. Not in the immediate future, let me tell you!

An honourable member interjecting

Photo of Terry YoungTerry Young (Longman, Liberal National Party) Share this | | Hansard source

Order! Order!

Photo of Michael McCormackMichael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | | Hansard source

Indeed. I listened to them very closely and earnestly in silence. They should give me the same respect, but that respect isn't always forthcoming. It doesn't worry me in the chamber, but it does worry me when they don't show Australian families and Australian businesses the respect that they should be showing them by making sure they work night and day to get those electricity bills down. That's the important thing. If they want to show respect, that's what they should do. They should respect the promises they made leading up to the election and get power prices down. When people get their power bills, that's when they'll know that there's been a change of government. That's when they'll know that Labor is back in power because you can rest assured that, when Labor's in power, prices will always be up, whether it's the power bill, the grocery bill or any other bill.

5:01 pm

Tania Lawrence (Hasluck, Australian Labor Party) Share this | | Hansard source

I must admit that I was a little wide-eyed upon reading this motion by the member for Menzies. He has reflected rather oddly upon the economic performance of the previous government, so let's set the record straight. The previous government bumbled its way through the COVID pandemic, just one of the reasons it was ceremoniously bundled out of office.

Prior to the pandemic, the previous government managed to double Australia's debt—well before the international health crisis. When the pandemic hit, the Morrison government had to be dragged by the scruff of the neck to introduce a wage subsidy scheme. Trade unions and the ACTU led that push and ensured the wage subsidy was better designed than it would otherwise have been. That is what kept Australia's head above water: unions and a Labor opposition putting workers, people, at the centre of the response to the pandemic.

Ignoring the coalition government and its dithering, the state and territory governments swung into action. They each had a plan. In Western Australia, the McGowan Labor government's plan was so well received that, at the election in 2021, Labor was rewarded with a record-breaking landslide win, securing 53 out of the 59 seats in the legislative assembly. At the risk of sounding a tiny bit parochial, McGowan's strong and assertive approach to protecting WA's population and economy created the $200 billion bedrock upon which Australia, as a nation, avoided some of the worst health and economic disasters experienced by comparable nations. In order to do so, the McGowan government had to spend a fair bit of time and energy ignoring the Morrison government's so-called plans.

This government has been upfront about the fiscal and monetary challenges it's inherited and is taking action. Treasurer Chalmers' budget delivered in October will be the first of many to start unscrambling the rotten eggs of $1 trillion of debt. The Liberals have left us with stagnant wages and rising inflation, all festering after a decade of denial and neglect. If the previous government were still in office now, the same cost of living challenges would be present, but not the same will or capacity to act. We're giving Australians a hand up out of difficult circumstances born of the previous government's decade of utter indifference. This is why we are investing in cheaper child care to give parents more options to work and earn, making PBS medicines cheaper to ease the cost burden and keep people healthier, getting wages moving again and empowering workers to earn more, and paying down the debt. Contrast that with the one-trick pony the previous government had become addicted to—handouts—an approach we know would not help Australian families and workers.

Only today, the Australian newspaper reported on how our fiscally responsible budget has spared many Australians from the pain of unnecessary inflation increases and further interest rate hikes—a rare compliment from the Australian and a case of credit where credit is due. To give some credit to the previous government, they were the masters of illusion. With so many announcements and so little delivered, you can only pretend for so long before you are found out, and they were found out six months ago. Yet I stand here responding to a motion created in the house of mirrors that created the economic challenges the Albanese government is now tackling head-on.

This motion mentions energy prices. Since May, we've had a minister for climate change and energy. The true path to long-term sustainable lower energy prices is the rapid transformation to a green energy economy based on renewables, a dependable grid and forms of storage including batteries. One by one, members of the coalition are come to that very realisation as, to borrow a phrase from former Treasurer John Dawkins, they each 'stumble backwards into the future'.

The member for Menzies also mentioned wages, after years of coalition governments when low wages were a deliberate design feature of their policies. This is after the first act of the Albanese government was to support a wage rise for low-paid workers. This is after the member for Menzies has sat in the House and heard many times the Minister for Employment and Workplace Relations utter the phrase: 'We will get wages moving again.' I may have missed it, but I do not recall any coalition government ministers ever saying, 'We will get wages moving again'—certainly not while waving the legislation in their hand. It is, in any event, good to hear that at least the member for Menzies wants to see wages moving again and this is exactly what the 'secure jobs better pay' bill will do. I look forward to seeing that pass through the Senate over the course of the coming fortnight. The motion also mentions tax increases. It must be a lazy copy and paste from the Liberal Party playbook. No tax increases have been mooted by the government for ordinary taxpayers, so, unless members want to go into bat for tax-avoiding multinationals, perhaps it should have been omitted.

These are difficult times and challenges, and I'm proud to be part of a government that is taking action.

5:06 pm

Aaron Violi (Casey, Liberal Party) Share this | | Hansard source

While the minister might have spent a lot of time talking about wages going up, the budget shows that real wages are going backwards under this government. Talk is cheap and actions speak louder. The reality is that Australia as a nation should be proud of the way in which we responded to the threat imposed by the COVID-19 pandemic. The Australian economy, thanks to the strong fiscal and economic management of the previous government, was able to weather the storm and exit the pandemic as one of the strongest economies among Western countries. None of this would have been possible without the leadership and determination of the former government.

The former coalition government ensured that all Australians were given the opportunity to withstand the impact of the pandemic and recover quicker and stronger than any other advanced economies such as the United States, the United Kingdom and France. They made support available to people from all backgrounds to provide stability through this troubled time. One such program implemented by the Morrison government was JobKeeper, which enabled 700,000 Australians to hold onto their jobs during this period, especially in small business, to help the unemployment rate stay low while job insecurity was high. I was working in business at that time and I can attest firsthand to the impact JobKeeper had in keeping our business afloat and keeping Australians employed. This solidified the decrease of the unemployment rate to 3.5 per cent as of September 2022, which is a far cry from the unemployment rate of 5.7 per cent the coalition inherited from the Rudd government in 2013. This result highlights why it is an insult to all Australians when the Treasurer and those opposite talk about a trillion debt with nothing to show for it. Not only is the trillion dollar debt a lie and political spin—debunked by economists and that conservative place of media, the ABC Fact Check—but it devalues the lives saved and the jobs saved by the actions of the former government. The Treasurer also never mentioned in his budget speech that this budget increased debt levels compared to the coalition's budget in May—a fact that he does not like to mention.

As the representative of my electorate of Casey, I was anxious to see the government's economic plan for the 2022-23 budget, how this would build on the foundations of pandemic recovery put in place by the previous government and what the impacts on my community would be. On budget day, I couldn't have been more disappointed. In addition to no economic plan, the Albanese government ripped away millions of dollars of infrastructure funding which would have ensured the safety of my constituents—funding that was bipartisan. The $150 million roads to communities project for sealing dirt roads across my electorate was dumped in favour of the $2.2 billion suburban rail link—a project not even reviewed by Infrastructure Australia yet. That's not to mention the $110 million for the Wellington Road duplication that was cut by this government, decreasing safety for those in the Dandenongs.

Looking to the future, under the current government, Australians have nothing to look forward to. Under this government's reckless strategy of spend more, save less, our nation's debt has been predicted to skyrocket by over $230 billion. They're in charge now and they are taking action. This will lead to increased interest repayments which will take over $25 billion out of the budget by the 2025-26 financial year, taking money out of health, leaving our communities short-changed when it comes to funding.

This increased spending will only lead to one thing for Australians: Labor's bread-and-butter plan of raising taxes. From the budget, Labor's forecast is an increase in taxation by almost one per cent of GDP, raising the overall tax receipts to 23.4 per cent of GDP. It is clear that this government has no plans for the Australian economy. All we hear is political spin and excuses. This will make life harder for the residents in Casey and the nation. This Treasurer needs to stop blaming others; he needs to take responsibility, realise he is no longer in opposition and actually deliver for the Australian people.

5:11 pm

Sam Rae (Hawke, Australian Labor Party) Share this | | Hansard source

May I extend my thanks to the member for Menzies, who I do have great regard for. In this case I extend my thanks because he is allowing us on this side of the House to highlight how the Albanese-Labor government is delivering responsible and targeted relief to Australian households after almost a decade of economic mismanagement and wilful neglect by those opposite.

As we know, those opposite often like to point to economic management as their greatest strength. They can't be relied to build schools or invest in health, but the one thing that they hold onto is that they are apparently great fiscal and economic managers. We know that this claim is entirely false, because they didn't manage to balance the books. In fact, for the benefit of everybody here, I am happy to summarise that decade of economic management, to assess the claim and draw together the economic record of the previous government in just a few words: $1 trillion of debt. The Liberals' economic legacy is $1 trillion of public debt, with nothing to show for that decade of debt driven cost.

Now, those opposite will claim that it was COVID-19 that caused this—they claim all sorts of things—but we know it was only in March this year that the former member for Kooyong delivered a budget that was absolutely rife with waste and pork-barrelling. The Australian people saw this; no-one was fooled by it. The truth is that the Labor government has inherited a dire budget position because of this terrible economic management by the former government over the last decade. This astronomical debt—I will say it again: $1 trillion of debt—provided no economic dividend. There was no economic investment attached to this and no economic dividend for the taxpayer. Instead, they oversaw the worst decade for productivity in half a century and the lowest level of business investment in this country since 1992. That doesn't sounded very good economic management to me. Unfortunately the Liberals' failure to drive economic supply left Australia exposed to the inflationary pressures of the global economy. We are now suffering the results of that.

I would also like to draw the Chamber's attention to the line in the member for Menzies's motion about low wage growth. Deputy Speaker, I trust that the irony is not lost on you or the rest of the people in this Chamber. Those opposite oversaw a decade of wage stagnation, standing in the way of any possibility of wage growth at every opportunity. It was only months ago that the former Prime Minister described a $1-an-hour increase to the minimum wage as 'reckless and dangerous'. We know that this was not a mistake. The Liberals themselves have admitted that low wages were a deliberate design feature of the economy that they were managing. Just over a week ago, they chose to vote against the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 in the House of Representatives, further attempting to suppress wage growth even from the opposition benches.

The record of the Liberal Party on wages is clear. Sadly, everyday Australians, like those in my electorate of Hawke, are still paying the price. Real wages are lower today than they were 10 years ago. The economic legacy of the former Liberal government was to set the conditions for the cost-of-living challenges facing so many Australians today: low productivity, low business investment and no real wage growth. Whilst Australians know that the Albanese Labor government did not create these economic conditions that we face, they did elect us to address them. That's why, in last month's budget, the Treasurer detailed Labor's economic plan to deliver a direct and deliberate response to the challenges facing our economy, including the cost of living. Under the Albanese Labor government, almost 7,000 families right across my electorate, from Ballan to Sunbury, will be provided with cheaper child care as the maximum childcare subsidy is lifted to 90 per cent. Families in Hawke will also see paid parental leave expanded, providing parents with a full 26 weeks, scaled up over time. The cost of medicines will be slashed as the cost of scripts at the local pharmacy is reduced by $12.50 a script. The rising cost of housing will be addressed through the new housing accord.

The key piece to addressing the cost of living, however, is getting wages moving again. One of the very first acts of the Albanese Labor government was to successfully argue for an increase to the minimum wage, lifting the income of almost three million of Australia's lowest-paid workers. Earlier this month, after receiving a submission from the Albanese government, the Fair Work Commission ruled that aged-care workers would receive a full 15 per cent pay rise. Just over a week ago, the Labor government's Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 passed the House. This bill will restore the balance between the power of workers and the power of employers at the bargaining table. This will deliver stronger wages for Australian workers and stronger relationships between employees and their employers.

Photo of James StevensJames Stevens (Sturt, Liberal Party) Share this | | Hansard source

The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.