Senate debates

Thursday, 22 June 2017

Bills

Productivity Commission Amendment (Addressing Inequality) Bill 2017; Second Reading

11:07 am

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

I am pleased to have the opportunity to participate in the debate on the Productivity Commission Amendment (Addressing Inequality) Bill 2017. I support this bill and congratulate my friend and colleague Senator McAllister on her initiative in bringing this bill before the Senate and commencing a debate on inequality, one of the great social and economic issues facing the nation. The bill amends the Productivity Commission Act 1998 to expand the general policy guidelines for the exercise of the Productivity Commission's functions to require consideration of inequality. The bill establishes a framework for the Productivity Commission to regularly report on economic inequality.

I have been a long-time critic of the Productivity Commission since appearing before the commission and former Commissioner Banks on the future of the vehicle and component industry many years ago. I appeared in my role as the national secretary of the Australian Manufacturing Workers' Union. Arising from that hearing, the commission set the stage for the destruction of the vehicle and component industry in this country. It did not do a lot for equality and it did not do a lot for working people. The commission, in my view, is far too dominated by economists. Worse still, these economists are predominantly advocates of neoliberal economics who argue that the economy will reach equilibrium, in which all resources will be fully employed, if only government is minimised.

These people in the Productivity Commission are the acolytes of the Austrian school of economics, influenced by Friedrich Hayek, and the Chicago school of economics, influenced by Milton Friedman. It is my view that, unless there is an injection of economists who understand the role of the state and Keynesian economic principles, the majority of the reports will be guided by an increasingly discredited economic theory that increases poverty and inequality. There must be an injection of economists who are not bogged down by their ideological presumptions, such as, 'Markets are always efficient,' or, 'Government is always inefficient.'

The Productivity Commission can always be relied on to minimise the role of government and maximise the role of the so-called free market. We therefore need a renewed debate on the role of government in reducing inequality while moving away from the sterile and unrealistic slogans of the coalition, such as 'jobs and growth' and 'innovation agenda' and the empty rhetoric of trickle-down economics, of which we heard so much about from the previous senator in this debate, Senator Macdonald.

As the renowned Nobel economics laureate Joseph Stiglitz stated in his book Freefall: America, Free Markets, and the Sinking of the Global Economy:

Economics had moved—more than economists would like to think—from being a scientific discipline into becoming free market capitalism's biggest cheerleader.

The Productivity Commission is an example of this. The economists in the Productivity Commission, who can pontificate on any issue that the government brings before them, were missing in action and failed to analyse or understand the problems being created by greed and corruption in the US finance sector which led to the great recession. Where were all the alarm bells from these right-wing economists in the Productivity Commission that there was something happening in the US that would lead this country into what almost became a recession?

We would have been in a recession if we had not had a Labor government in place to actually use Keynesian economic principles to keep people at work, keep communities operating and keep businesses and corporations going. Labor in government, in my view, should not solely rely on advice from the Productivity Commission, unless the dominance within the commission of free market economists is balanced by economists who understand the importance of the role of government in the economy. Unless we do this, the good aspiration contained in this bill that the Productivity Commission consider inequality and establish a framework to regularly report on inequality will be frustrated by the dominance of the Chicago school of economics thinking of the economic staff in the Productivity Commission.

What are the drivers of inequality? The drivers of inequality are the neoliberal economics we just heard from Senator Macdonald. Again, he just used the same tired, old, regurgitated rhetoric that the coalition have been using for years about trickle-down economics. They think that, if they give a $65 billion tax cut to big business who do not pay their fair share of tax now, there will be economic growth and jobs will be created. What a load of tosh from Senator Macdonald and the coalition on this issue. They argue about too much tax and small government. Small government means that you end up not having the capacity to provide the health services, the education services and the infrastructure that this country needs to continue to compete at an international level.

They do not deal with multinational tax avoidance, which is a great driver of inequality. They constantly attack the union movement. We heard from Senator Macdonald. He is full of rhetoric about the trade union movement without understanding the benefits that the trade union movement brings to working class people in this country through decent wages and decent conditions and how that flows on to small businesses across the country because workers have a dollar in their pocket to spend in those small businesses.

Another driver of inequality is the budgetary decisions of the coalition. No-one should ever forget the 2014 budget. It was the epitome of inequality created by government policy. If you ever want to look at what would drive inequality, go back to the 2014-15 budget of this government: changes to welfare for young people; reductions in hospital funding and health expenditure, including new patient contributions to the cost of medical services; and reductions in school funding. That is where they really are. The only reason they are trying to put up a smokescreen that they are interested in education is that they were being killed out there, day in day out, in the political debate on education and school funding. That is the only reason they have actually been dragged kicking and screaming to any semblance—and a pale imitation—of what Gonski is really about. They actually reduced family tax benefits in that budget. They reduced the indexation of the age and disability pensions. Cuts to pensioners was their DNA in their policy and their budget. And these cuts, including reduced funding to higher education and increased student contributions, mainly affected low- and middle-income households.

I will not be lectured by any of that mob, that rabble of a government across there, on inequality—absolutely no way. They all, like lemmings, supported these cuts when they first came to government and argued that this was good for the economy. Well, they destroyed people's lives! I will not accept any criticism of Labor policies from a mob who just do not understand inequality. In that budget, young people under 30 were denied access to income support for six months of every year, losing up to $255 a week. Young kids were supposed to starve if they did not have their family looking after them! What an obnoxious policy to bring in a country like Australia—which had an international reputation for egalitarianism. Young people aged 22 to 23 were transferred from Newstart allowance to the lower youth allowance. Young people with disabilities were reassessed, with income reductions of up to $214 a week in the disability support pension.

Indexation changes were put in place that would erode the real value of payments over the long term with the loss of $80 a week in a decade. They abolished the pensioner education supplement. And they tightened access to family payments, impacting mainly on low-income families with children—in particular, sole parents. They made changes to family tax benefit B. Sole parents with a youngest child aged between six and 12 lost $37 a week and those with a youngest child aged over 12 years would lose $58 a week. This is their understanding of inequality. This is how they behave when they think they can get away with it.

Do not listen to any coalition member who ever stands up here and talks about looking after working class people in this country, because it is not in their DNA. They do not care about working people. They care more about the big businesses that put the dollars into their election funds, whether that is done legally or in the back seat of a Bentley with a property developer up in Newcastle handing over $10,000 in a brown paper bag to the coalition. They do not care about working class people in this country.

The coalition want us to change the payment indexation for pensions. They have changed it from the CPI to wages. That would erode the value of the pension by $80 a week over 10 years. That is how much they care about pensioners. They extended the qualifying age for the age pension without any increase in the Newstart payment, reducing income for those unable to work up to 70 by between $64 and $166 a week. This was the coalition in action. Boilermakers, fitters, builders and labourers are being told, 'You've got to work until you're 70.' What a nonsense!

Then look at the group of Australians who are suffering most from inequality—Aboriginal and Torres Strait Islanders. One hundred and fifty programs were consolidated into five. The government cut $493.7 million from Aboriginal and Torres Strait Islander support, and $160 million of the cut was from a reduction of expenditure on Indigenous health programs. So no wonder the government cannot deal with inequality. It is because they just do not know what it means. There are cuts to Indigenous language support programs of $9.5 million. They reduced funding to the National Rental Affordability Scheme, which was putting low-income people into houses, with the loss of round 5 incentives and 12,000 dwellings that should have been in there for low-income households.

They cut funding to homelessness services and they did not give any indication that they would continue funding. They have defunded housing help for seniors and defunded the first home saver account scheme. That was when they first came into government. Now in the most recent budget they have put it back in. They do not know if they are Arthur or Martha, this mob. They will just do anything to try to save their necks, because they are such a rabble of a government. They are so divided internally. They do not want to deal properly with the issue of inequality. They do not want to deal with the issues that really go to ensuring that there is a fair and egalitarian society in this country.

Who could ever forget the sight of former Treasurer Hockey, who was telling everyone there were 'lifters' and 'leaners', becoming the 'leaner-in-chief' over in New York? Who will ever forget him and the current Minister for Finance, Minister Cormann, celebrating the imposition of all this inequality on Australians with a fat Havana cigar. It probably cost more for one cigar than they expected an Australian in trouble to survive on for a day. It was absolute nonsense. The current Prime Minister, Malcolm Turnbull, in an interview said he supported every aspect of that horrendous budget. So the coalition cannot criticise anyone in relation to what we are doing to try to deal with inequality.

Inequality comes at a cost to the whole economy. There is a vicious spiral when inequality is not dealt with. Look at what has happened under this government—record underemployment, record-low wages growth and record-low share of national wealth, down from 75 per cent in the 1970s to 53 per cent now. There is the highest level of income inequality in 75 years and yet the government still support cuts to penalty rates for 700,000 of the most vulnerable, low-paid workers in this country. They are an absolute disgrace.

Thankfully, in more and more countries around the world they are getting rid of these policies of globalisation, privatisation, competition policy and austerity. Thatcherism is dead—it is just that these people do not understand that. Even the International Monetary Fund has identified that reductions in the number of trade unionists and the taking away of the rights of trade unions results in more inequality. That is the speciality of this mob—they know that if they can destroy the trade union movement, weaken the trade union movement, working class people will suffer more and more inequality. When the International Monetary Fund is saying that, then we should all be very concerned about what they are about. Deunionisation weakens earnings for middle- and low-income workers. That is what they are about—giving $65 billion of tax cuts to big business on the theory of trickle-down economics and, while they give tax cuts to millionaires, increasing taxes on ordinary working families. That is their view of inequality. That is how they try and deal with inequality. They do not have a clue.

The trade union movement is absolutely essential to dealing with inequality. We have seen a position where every time this government gets an opportunity they try and weaken the rights of workers who belong to trade unions. They try and diminish the capacity of workers to enterprise bargain effectively. And the push to enterprise bargaining has created a position where multinational corporations can use all of their resources against workers and their unions, but the unions cannot take any coordinated action across that company. I think it is a disgrace. That should be changed. The right of entry for union officials should be liberalised so that we can actually get in there and talk to workers about the problems they have on the job. But this government is so busy with its ideological obsession, with destroying the trade union movement, cutting rates for pensioners and getting rid of decent funding for education and health, that they do not care. They are an absolute rabble and a disgrace of a government. (Time expired)

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