Thursday, 1 August 2019
Household, Income and Labour Dynamics Survey
On behalf of Senator Gallagher, I move:
That the Senate—
(a) notes that:
(i) the Household, Income and Labour Dynamics in Australia (HILDA) survey, released on 30 July 2019, has confirmed that Australians are worse off since the election of the Coalition Government in 2013,
(ii) HILDA revealed real median household annual disposable income has declined from $80,208 in 2013 to $80,095 in 2017,
(iii) wages growth has stagnated under the Coalition Government's watch,
(iv) when asked why wage growth was stagnating under the Coalition Government, Finance Minister Mathias Cormann said – "This is a deliberated feature of our economic architecture ", and
(v) the Coalition Government supports continued cuts to the penalty rates of Australia's lowest paid workers; and
(b) expresses its disappointment in the Coalition Government's failure to pursue policies to increase household incomes in real terms, address growing congestion and combat increasing rates of poverty revealed by the HILDA survey.
Earlier today, the government ran out of legislation again and this chamber was forced to debate the Governor-General's opening address to kill time until question time. The reason for this is apparent: the government have no agenda. They have no plan to grow productivity, they have no plan to increase wages, they have no plan to address climate change, they have no plan to tackle cost of living. There was something very telling about the speeches those opposite gave when they were filibustering. All they seem to want to talk about is the Labor Party: our policies before the election, our time in government—quite some time ago—us. It's been a consistent theme for this government since they took office in 2013. Three Prime Ministers, all united by the inability to realise that they are no longer in opposition. They're the ones with the levers of government, not us. This is their third term in office. The time when they can blame Labor has long passed. It is time for this government to take responsibility for what has happened on their watch and actually do the work necessary to fix it. What has happened on their watch?
The latest data from the Household, Income and Labour Dynamics in Australia survey shows that this government has presided over a collapse in the growth of living standards for ordinary Australians. What does the HILDA data say? There are two big economic messages. Wages are stagnant. Australians are right to say that they feel like they're falling behind, because wages are flat and they have been for a while. Real median household disposable income, an amount equivalent to the money households actually have in their pockets to spend, fell close to 0.6 per cent in the year since the last survey. There has been no increase in median household incomes since the coalition took office. In fact, it has declined since 2013. Australians are now worse off than they were before the GFC.
The second biggest message is this: Australia faces growing inequality. Wages are flat across the economy, but not everybody is doing equally badly. There is a divergence between mean and median incomes. Since 2009, the median household income has remained flat, whilst the mean has risen by 3.4 per cent. What does this mean? The average worker is earning less than the average wage. The reason for this is that a small number of high-income earners are skewing the data upwards. It's reflective of what the HILDA data shows about inequality generally. HILDA measures long-term inequality. It's able to measure the intergenerational movement of people across income levels, the extent to which your parents' income determines yours. The HILDA survey found that about a third of those who in 2001 were a child in a household in the poorest 20 per cent were still in the poorest 20 per cent of the population when an adult in 2017. What about the other side of the coin? Again, about a third of the people who are in the top 20 per cent of households as a child were also in the top 20 per cent as an adult. The report notes clear indications of a positive correlation between parental income and the income of children in later life.
What does that mean? The technical description is that social mobility is more limited. To use the Prime Minister's words, he likes to say, 'If you have a go, you get a go'. That's not what this data says. We risk becoming the kind of country where you only get a go if your parents had a go first. This is a government that is bereft of vision. They have no economic policy ambition beyond cutting taxes. What is the plan to increase labour productivity? What is the plan to encourage local firms to innovate or explore new markets? What is the plan to increase competition in moribund sections of the economy? What is the plan to increase the linkages between universities and businesses to allow research to drive innovation? We never hear about any of those things, because the government is not interested in them. The only thing they are interested in is tax cuts that the country can't afford.
The Prime Minister described increasing Newstart as 'unfunded empathy'. I tell you what, this government's commitments to tax cuts are certainly unfunded. They may not be empathy, but they are definitely not funded. The government is actively hostile to the things that increase wages for ordinary Australians. They are hostile to unions, hostile to working people representing themselves in their workplace and hostile to working people exercising the practices of democracy. The evidence from overseas is countries with higher rates of unionisation and union activity have higher rates of labour productivity and higher wages, but this government has spent every day since it was elected trying to find new ways to undermine the power of working people and their representatives. They established a trade union royal commission in their first year. They have spent a lot of time attacking industry super funds, when it was clear to any impartial observer that the problems were actually in the retail super funds run by the banks.
The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 that they have recently reintroduced appears to be the only serious policy agenda they have. Again, it is all about unions. There is nothing about ordinary people and nothing about the economy. They are hostile to penalty rates, hostile to workplace protections, hostile to measures that improve safety and hostile to actions that will improve wages. Who knows what fresh horror the Minister for Industrial Relations' review of the industrial relations system is going to recommend, but it won't be in the interests of working people. There is something the government could do right now to increase the wages of working Australians, and that is to act on penalty rates. I have very little hope that they'll do that, because they have had a myriad of opportunities and they haven't been interested in any way so far.
Maybe over the long term they could do a couple of other things. They could do worse than look at the recommendations of the Productivity Commission in their report about inequality last year. During his address to the National Press Club about the report, the current chair, Peter Harris, didn't talk about corporate tax reform as a solution to inequality and entrenched disadvantage. He noted the low rates of income growth. He talked about productivity growth, and he pointed to the three key areas from Productivity Commission's Shifting the dial: Improving Australia's productivity performance report of last year. Those were the opportunities that come through higher work force participation and personal wellbeing, through preventing chronic disease. He pointed to more adaptable workforce skills through practical improvements to secondary and tertiary teaching. He pointed to reducing the number and complexity of overly restrictive planning and zoning restrictions to make our cities work better. There was an agenda laid out by the Productivity Commission, something that actually went to some economic challenges that we would do well to address.
These are not the things on this government's agenda. The government's single-minded obsessions are talking about the Labor Party, talking about working people and their representatives, and essentially sitting on their hands while the country goes backwards, as the HILDA data so amply demonstrates.