Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Hansard source

I'd like to start by thanking Senator McAllister for introducing the Productivity Commission Amendment (Addressing Inequality) Bill 2017 to the Senate. The provisions in the bill go to the heart of Australian values. There's no doubt that Australia is a prosperous country, but we're also a country that prides itself on compassion and egalitarianism. The principle of equality of opportunity—that old 'fair go' as most Australians call it—is a core Australian value.

This bill would ensure that the Productivity Commission, one of the key drivers of public policy development in Australia, takes account of this core value when it provides advice to government. The bill will achieve this in two ways. Firstly, it will amend section 8 of the Productivity Commission Act 1988 to add:

… the need to mitigate the negative effects of inequality on the Australian economy and the Australian community.

That would be added to the Productivity Commission's policy guidelines. This will ensure that as well as important considerations such as economic growth, industry performance, employment and regional development, the important Australian principle of the fair go is taken into account in the commission's work. The inclusion of inequality in the commission's policy guidelines has a great deal of potential to guide Australia's response to the issue. After all, while the Productivity Commission is an advisory body, their advice is given significant weight when it comes to devising public policy.

An example of that, as we have seen recently, is the Fair Work Commission's reliance on the Productivity Commission's report in their recent decision on penalty rates. It would be an interesting exercise to consider how the Productivity Commission's advice on penalty rate cuts for some of Australia's lowest-paid workers might have looked had they been required to take inequality into account.

The bill will also require the Productivity Commission to publish a report every five years on the extent of inequality in Australia. And this five-year cycle will be the same as that for the intergenerational reports produced by the Parliamentary Budget Office. We only have to look at the contribution of the intergenerational reports to public policy debate to get an idea of the potential impact these reports could have on shaping government's response to inequality.

What is proposed in this bill should really be uncontroversial, yet we have heard from senators on the other side of the chamber who speak in opposition to this bill. I really am a bit perplexed as to why they do that. On the airwaves, we heard the Treasurer, Mr Morrison, and the finance minister, Senator Cormann, deny that there has been a growth in income inequality in Australia. I am not sure what planet they are on, but it surely is not the same as the planet I'm on. Do those opposite truly and honestly believe that inequality isn't growing? If they do, surely they wouldn't have an objection to an independent report from a respected body like the Productivity Commission that could confirm this and settle the manner once and for all—unless of course they don't actually believe it. The fact is that those opposite know; they know that inequality is growing in Australia. And they know that the policies of their government are contributing to that, but they're obviously embarrassed to admit it.

The government's denial of growth in income inequality is contrary to the recent evidence. In October last year, the International Monetary Fund said that Australia was among the countries with the highest growth in income inequality. And the latest Household, Income and Labour Dynamics in Australia—or HILDA, as we commonly refer to it—report, released in August last year, shows that following the election of the Abbott government, household incomes started to decline in real terms. The HILDA survey found childcare costs were soaring—I think most of us know that!—particularly for low- and middle-income families, and stated these may be 'acting to increase inequality'. It also found that mortgages for young Australians aged 18 to 39 had more than doubled since 2002. And no more starkly has Australia's growing income inequality been laid bare than in a recent report from Oxfam Australia.

Over the decade since the global financial crisis, the wealth of Australia's billionaires has grown by 140 per cent—140 per cent!. But at the same time, average wages have increased by 36 per cent and household wealth by only 12 per cent. The top 10 per cent of Australians own more than half of Australia's wealth, whereas the bottom 10 per cent own only 0.2 per cent. We also had a report in December last year from the Victoria University Centre of Policy Studies, which found that not only had wages growth hit record lows but the wages of the lowest-paid workers had not grown at all. A report in August last year on the Australian Digital Inclusion Index found there was a growing divide between the digital inclusion of people in high- and low-income households.

It's a matter of national shame, I believe, that in a country that is one of the most prosperous in the world in terms of average incomes we have three million Australians, including more than 700,000 children, who live below the poverty line. How can anyone deny that there's a problem with inequality in Australia when we have the 12th highest GDP per capita yet so many Australians living in poverty? But those opposite continue to bury their heads in the sand and deny that there's a problem when it comes to inequality—either that, or it suits them to deny there's a problem because it's their regressive policies that are contributing to the growing divide between the haves and the have-nots. Those on this side of the chamber, when we stand up for equality and fairness, often get accused by government senators of waging class warfare or the politics of envy. If there's one thing those opposite can be trusted to do and do well, it's to turn supporting fairness into a negative.

I want everyone to understand: the term 'class warfare' is just a clever way of ascribing a negative connotation to what is no more than advocating for a more just and equal society. That's what we on this side of the chamber do. Labor believes in fairness, believes in egalitarianism and believes these are values that Australians also hold dear.

As I've said time and time again in this place, the real class war is that being waged by the Turnbull government. It's being waged against the vulnerable and the disadvantaged on behalf of big business. And yet when Labor stands up for disadvantaged Australians it gets accused of starting the so-called class war that those opposite have been perpetuating for decades.

We have seen time and time again the government use their policies to target people on low and middle incomes. Just last year, the government cut $1.5 billion in family tax benefit part A, affecting 600,000 families. They have implemented changes to child care, which will make 279,000 families worse off from July this year. And, in a dodgy deal with the Greens, they made cuts to pensions that see some pensioners worse off by up to $14,000 a year. And this government also, through their so-called Gonski 2.0 education funding changes, will rip billions of dollars out of schools, including $68 million from schools in my home state of Tasmania over the next two years. This is on top of the billions the Abbott and Turnbull governments have already cut from education and health. Australia's access to affordable health care has been further exacerbated by the government's Medicare rebate freeze, which is making it harder and harder for low- and middle-income Australians to even see a doctor.

It's also worth mentioning the sustained attacks by the Liberals on superannuation. Under Labor a 12 per cent superannuation guarantee was due to commence in 2019, yet under this government the superannuation guarantee remains stuck at 9.5 per cent. Now it's going after the governance of industry super funds, despite those funds providing substantially better returns for Australian workers.

Sadly, while this government continues to attack low-income earners with its policies, it looks after its mates at the big end of town. Mr Turnbull has given a $16,500 tax cut to millionaires, and he's going to give away $65 billion of tax cuts to big business without any evidence that it will have a commensurate economic benefit.

We also have the consequences of inequality, which this government has failed to take any action to address. We have falling rates of home ownership amongst young Australians, who are finding it more and more difficult to get into the housing market. We also know that wages growth has slowed to a crawl, and this is eating into the incomes of ordinary Australian families. Wages growth is now at its lowest level in 20 years and has failed to keep pace with growth in the economy or company profits. Labour productivity has grown by 20 per cent over the last decade, but at the same time there has only been a six per cent growth in real wages—that is, less than one-third of the growth in labour productivity.

As an aside, there are a number of people in this room at this moment who have worked in the union movement—and I think we're all proud to have been union industrial officers or organisers or whatever role we held there, even though those on the other side tend to think there's a negative in that—and it's interesting to note that stagnation in wages growth appears to come at a time when the number of enterprise agreements is falling. But what do we get from the other side? Instead of trying to strengthen the enterprise bargaining system, we've got a government that's doing the bidding of its mates in big business and attacking trade unions at every single turn.

It's bad enough that more and more workers are being stuck on award wages, but many are also being exploited and underpaid. It reminds me of the rip-offs in the 7-Eleven, Pizza Hut, Domino's Pizza, Caltex, Bakers Delight franchises—and the list goes on—all the areas exposed by Four Corners.

We all know this government has done nothing—not a thing—to address sham contracting or the use of labour hire arrangements to undermine the pay and conditions of workers. The government has stood by while a pay cut of up to $77 a week has been delivered to 700,000 of Australia's lowest-paid workers.

Late last year there was an opportunity to restore these penalty rates. Mr Christensen had promised he would vote to restore penalty rates, but, sadly, he reneged. He did this spectacular backflip and, amazingly, he voted against a Labor amendment that echoed the provisions of his own bill. Unlike those opposite, Labor will continue to fight for low-paid hospitality and retail workers and the penalty rates that they rely on.

The other issue I'm reminded of, as I speak today about the policy failures of this government in regard to tackling inequality, is of course its lack of action when it comes to multinational tax avoidance. I've said this several times in this place before: not only has this government failed to take real action on multinational tax avoidance; when they came to power they set about reversing a number of Labor's reforms. Our legislation to plug loopholes in Australia's transfer pricing rules and anti-avoidance provisions and to crack down on companies overvaluing assets in international transactions was wound back by this government, handing back more than a billion dollars to multinational companies.

While this government has been crying about their own anti-avoidance laws, the Australian Taxation Office confirmed in the last round of Senate estimates that those laws had not netted a single dollar from multinational tax dodgers. In fact, much of the money that has been clawed back by the tax office was thanks to anti-avoidance laws introduced under Labor, which the Liberals of course opposed. It's pretty shocking, I feel, that more than one-third of large firms and multinationals pay no tax whatsoever, according to the most recent data.

Another failure that we've debated extensively is the failure of the government to crack down on bad behaviour by Australia's banks and financial institutions. I don't know how many years and how many hundreds of stories of inappropriate lending, loan fraud, bad advice and unfairly declined insurance claims the government had to hear before they finally—quite belatedly but finally—backflipped and accepted the need for a royal commission into the banks. They were dragged kicking and screaming into accepting that there was a need for a royal commission into the banks.

Yet another area where the government has failed to act is the use of discretionary trusts to split income and minimise tax. This is a mechanism used mostly by affluent households, and something which Labor has plans to address. Our policy is quite well targeted, in fact, and will not affect charitable trusts, deceased estates or people who work in or run a small business.

It's clear that Labor is serious about tackling inequality, while those opposite are not. While tackling growing inequality is a worthwhile end in itself, we should also recognise that there are other benefits. Often the debate around income inequality is framed as balancing it against the need for economic growth, but that is a completely false dichotomy. Analysis conducted by the OECD back in 2014 found that countries where income inequality is decreasing have faster economic growth than those where it's increasing. This is a view backed up by Nobel Prize winning economist Professor Joseph Stiglitz, who explained that low-income earners tend to spend a larger proportion of their income, thereby stimulating the economy. Inequality, Stiglitz argues, leads to lower consumption and weaker aggregate demand. This argument overturns the whole theory of trickle-down economics that we keep hearing from the other side, to which conservative governments tend to subscribe. Really, there's no proof that it works, but it suits those on the other side to use this process.

Of course, the other positive outcome of addressing inequality is improving people's access to economic opportunities. My colleague the shadow Assistant Treasurer, Dr Andrew Leigh, looked at this in 2009 as a researcher. Dr Leigh and his associates found that, in the 10 countries they studied, social mobility and equality of opportunity went down as income inequality went up. Social mobility and equality of opportunity decrease as income inequality increases. To be honest, this isn't rocket science. It stands to reason that the more resources you have, the more opportunities you have to further yourself. If child care is available and affordable, you can afford to take up regular employment. If primary health care is affordable, you're more likely to avoid the consequences of chronic health conditions. If education is affordable, you have more opportunity to further your career prospects.

As I've said, this bill should not be seen as controversial. It makes sense, if the Productivity Commission is going to take into account such things as ecological sustainability and regional development, that inequality should also be on that list. We know how important the work of the Productivity Commission is in providing advice on driving industry productivity and improving the performance of the economy as a whole. But—and this is what people really need to think about—without this legislation, put forward by my colleague Senator McAllister, we are relying entirely on the private sector for advice about inequality in Australia, because there is no mechanism that compels federal government to routinely examine inequality. This bill provides such a mechanism and makes it far more difficult for any government to avoid the uncomfortable question of whether income inequality in Australia is getting better or worse. This question, of course, is one that would be particularly uncomfortable for the present government, which explains why they are so opposed to this bill. The government, through their actions in some areas and inaction in others, are contributing to worsening inequality in Australia. It is therefore hardly surprising that they oppose measures that would help put a spotlight on inequality. This is just another sign of a government that is becoming increasingly out of touch with the concerns of ordinary Australians.

What those opposite don't like about this bill is, if the Productivity Commission advice for tackling inequality were to be added, it would place public pressure on the government to actually address the problem. Taking serious action to address inequality goes against the philosophy of those opposite. They hate to admit this, of course, because they know it's not a view shared by most Australians who believe in the fair go. The Liberals believe it is the responsibility of the individual, not society, to further themselves. Rather than it being your circumstances, your resources and your opportunities that influence your outcomes, they believe it is your own personal failure if you can't achieve success in life. This is a party that subscribes to the flawed notion of trickle-down economics, and its members honestly believe tax cuts to millionaires and big business will drive job creation and economic growth rather than just line the pockets of already wealthy executives. (Time expired)