Senate debates

Monday, 2 December 2019


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

11:59 am

Photo of Tony SheldonTony Sheldon (NSW, Australian Labor Party) Share this | Hansard source

I rise with a great deal of pleasure to support the Productivity Commission Amendment (Addressing Inequality) Bill 2017. It seems absolutely practical to turn around and make sure that we've got a system that is tested, properly reviewed and researched to look at what's happening with inequality within our society. This is a significant and important piece of looking to make sure that the policies and strategies being implemented by government and civil society are performing in the direction that we want. We want to raise the entire community. We want to raise the standard of the community.

I listened with great interest to some comments from the other side of the chamber a bit earlier in this debate. Somehow, the ensuring integrity bill not going through is hampering equality. I find it amazing to hear suggestions that paying wages and superannuation is somehow a detriment, when the cost of building is 30 per cent higher, as alleged by the MBA, and, at the same time, the MBA and the intent of this ensuring integrity bill are actually hampering the voice of working people to stand up and argue for better conditions across a whole range of industries. I find it also of great interest when the suggestion is put, again from the other side of the chamber, that we need to expand the pie and create a larger pie. That's something that I'm sure many of us in this chamber would agree with. But how about we start looking at the fact that $6 billion has been stolen in wage theft from the construction industry? What contribution is that having to inequality? I would say it's substantial. What about the 2.2 million people on visas working in this country, the vast majority of whom are getting paid substantially less than they're legally entitled to? What about the migrant task force dealing with the inequality for migrant workers that has a whole series of recommendations that the government has yet to implement? What if we start putting a system in the Productivity Commission which has to start rating the government's performance? Our job in this chamber should be to grow equality and the performance of the economy.

I looked with great interest at the government's suggestion on how we deal with inequality. It is really intriguing. What the government has decided to do with inequality—and there are many examples over the last seven years of their term, as inequality continues to grow—is not support weekend penalty rates on numerous occasions. What the government did about inequality was not support—on numerous occasions—having an inquiry into the banking industry, which was hampering the economy growing. What's really quite amazing is that, regarding how we deal with inequality in more modern times—I'm talking about now—the government has turned around and decided that we need to review modern awards. We know that's all a code for turning around and taking away people's rights, for taking away their wages and taking away the sorts of incomes that actually deal with the issue of inequality. They're not suggesting—nowhere in the media are they suggesting—that we should say that wages should be increased under the modern award system in any substantive way to deal with the issues of inequality. Also, they want to look at unfair dismissal laws and protections. We also know that's code for 'how do we wipe out people's protections?' When you argue for equality, having dismissal protections means that people can't be victimised or are less likely to be victimised. People have more opportunity to turn around and have a voice. That is the quiet Australians, but what the government are really saying when they talk about the 'quiet Australians' is that they want to 'quieten Australians'. They want to silence Australians.

You've only got to see the sorts of results that are happening in our society now because of inequality. A very important address by Chris Bowen at the Macquarie University Economics of Health, Inequality and Behaviour conference held on 11 November looked at: 'Is inequality our biggest health risk?'

At that conference there was a focus on the importance of the social determinants of health in policy design. We know from recent work of Professor Philip Clarke and Guido Erreygers that the average life expectancy gap between the bottom 20 per cent of population and the top 20 per cent in socioeconomic terms is six years in Australia. Wealthy people live six years longer than poor people.

In 2007, Professor Clarke and Professor Andrew Leigh, in the lower House, presented a paper that further reported on the widening gap of inequality, and it is not reducing. The latest Australian Bureau of Statistics data in 2018 said death rates for residents, for example, in Rooty Hill in Western Sydney were nine people per thousand. This is three times more than the death rate for advantaged areas in Sydney like Crows Nest. Analysis of some ABS data by Macquarie University's Professor Nick Parr shows a 14.5 per cent reduction in death rates for the most advantaged 10 per cent of Sydney areas over the last six years. This is triple the average improvement in the most disadvantaged suburbs. One of Western Sydney University's professors for urban planning, Nicky Morrison, recently said:

Where you live shapes how easy it is to buy healthy food, use active transport and make social connections. The concentration of food deserts is particularly pronounced within Sydney's western suburbs, which compounds the problem of lower socio-economic groups eating poorer diets leading to associated health problems.

And while we know food deserts aren't the sole key driver, we know that this, in conjunction with conditionality of income, hours of employment and many other factors prone to those in the western suburbs increase nutrition inequality and lead to those residents being sicker and dying sooner. We also know that people in rural and remote areas of Australia are 13 per cent more likely to be inactive. They're 50 per cent more likely to drink at risky levels, and they're 69 per cent more likely to smoke. And those people are 40 per cent more likely to wait 24 hours for an urgent GP appointment. All these factors lead to a gap in life expectancy between the city and the bush which is, at is worst, 15 years.

Productivity is dramatically affected when so many Australians' poor health because of their wealth, or more accurately lack of wealth, is impacting on their lives. The amendment required the Productivity Commission to consider the importance of mitigating negative impacts of inequality on the Australian economy in the Australian community.

A recent study by authors Craig MacMillan, lecturer in economics at Macquarie University; Daehoon Nahm, senior lecturer of the department of economics at Macquarie University; and Michael Dobbie reported on 20 March 2018 said:

Over recent decades in Australia union membership has fallen from 40% of the workforce in 1990 to 15% in 2016 and so unions might seem less relevant in making a difference to what we earn. But our research finds that union members do earn higher wages per hour than non-union members.

It starts all coming together, doesn't it, about the ensuring integrity bill taking away the hand of representational rights of unions, democracy, voice of working people and the government's plan to turn around and go after awards. But the authors go on to say:

This is because union members have more experience with their current employer, in their occupation and in the labour market generally, than non-union members.

The study used data from the Household Income and Labour Dynamics in Australia, HILDA, Survey from 2001 to 2013. From a sample of 80,000 workers, it showed that male union members earned 12 per cent more per hour than non-union workers and that female union members earned 80 per cent more per hour than female non-union workers. They explored the pay differences and how they could be explained between the two groups, and they went on to say:

In economics, the more knowledge and skills a worker has, the higher productivity and wages they'll have.

That's the presumption, but they went on to say:

However formal education didn't seem to factor in as a decider of differences in wages between unionists and non-unionists in the study. Rather, these findings suggest that when unions negotiate collective agreements for members they are concerned about employment security, as well as wages and this is a deciding factor.

It also went on to say that the majority of union agreements also had particular workplace training requirements in them, which added to productivity:

This data found there were training initiatives in 80% of union negotiated agreements, compared to 52% of non-union agreements.

This goes clearly to the argument that if the government were actually thinking about what is in the interests of productivity and what is in the interests of dealing with issues of inequality then they'd not only be studying it and requiring the Productivity Commission to report on it but implementing policies that brought the question of inequality into the very fine detail of the opportunities to turn around and deal with that inequality. Of course, the government, as they say, are doing the opposite.

One of the important things in this Productivity Commission recommendation is to produce a report every five years on the state of inequality in Australia and its effects. This is part of a larger debate in the world about the measures and impacts of inequality. The World Bank, the Reserve Bank and the IMF—those three radical institutions; well, not so radical, but they are maybe having a radical thought for some on the opposite side—talk about stagnant wages and the fact that wage income is not increasing being a substantial downward pressure on the economy, that there is a need for capacity for people to turn around and earn more. You do that by people having a voice. You do that by what had been considered for many decades as obligatory in civil society in this country: the involvement of government, employers and worker representatives. But we find this government, rather, drowning out the voices of the World Bank, the Reserve Bank and the IMF by saying, 'How do we put more impediments into that voice realising wage increases?'

How do we actually deal with the inequality question? They have failed to turn around and look at the most fundamental ways of making sure that workers are properly dealt with. We've had 2.2 million temporary visas, with many of those workers having their wages thieved—being underpaid and exploited—and what was the answer from the government? Over a short period of time they've substantially increased the amount of temporary visas which have come into the country. We're part of the larger debate in the world about these measures and impacts of inequality—what is measured and what matters. How you measure inequality matters greatly. The Productivity Commission's work often sets the national agenda. Its research informs government opinion and the national narrative around issues of importance. Currently, we're not taking inequality into account. The commission is leaving out a significant piece of the puzzle.

The report from the three academics I mentioned earlier looked at these fundamental questions about better performance, higher training, higher skills, higher wages and more job security that are prevalent in union agreements in comparison with non-union agreements and where agreements don't exist. They came to the fundamental conclusion that not only is being in a union good for equality but, if you look at these other reports and recommendations, it's also good for the entire economy. Equality and the economy benefit from proper productivity and proper wages being paid. They benefit from the fact that we can have a better system for making sure that workers get paid an appropriate income and have appropriate job security. It means the Productivity Commission can actually road-test by research the decisions and policies that are made both within civil society and, incredibly importantly, by government—people within this chamber and the House.

Wealth inequality in Australia creates a host of policy problems. It affects our health. It affects educational outcomes. It affects happiness and satisfaction in work and life. It also affects economic management, reducing consumption and demand for goods, adversely affecting economic growth. The OECD, in its figures from 1980-2010, predicted that there would be a 5.5 per cent lack of economic growth across the world because of this inequality question. These are significant impacts on the livelihood, the fairness and the capacity of people to look after their families. As previously raised, Newstart is another area of inequality where the government again has sat on its hands. It doesn't have a policy of turning around and actually dealing with inequality—in actual fact, let's keep growing the pie!

Growing the pie without equality, without measuring it, doesn't grow the pie in any substantive way if inequality hasn't been dealt with. If you can't look at the inequality questions that we have presently within the community, if you can't look at it in the abstract, research based, figurative way carried out by the Productivity Commission rather than just concentrating on all the other intangibles then you are not dealing with the fundamental question about what our obligation is in driving for a better society within Australia. It raises serious questions about any suggestion that this bill should not be supported. It raises serious questions about accountability. It raises serious questions of transparency. It raises serious questions about the government's policies. It raises serious questions about the policies the government is presently pursuing.

In much of the debate on the ensuring integrity bill many senators spoke about the effect of that bill on stripping away workers' rights—an opportunity to talk about a particular instance with armoured car drivers and inequality, and the consequences of driving conditions down and driving well-paid union jobs into unsafe, non-paid union jobs. I can also touch on the bus industry, the virtues of equality of power and what the consequences of that bill would be. Workers who had been working in buses under assault from individuals in the community put bans on areas, which would have been illegal now under this act and would be reason to deregister a union. One example was in Western Sydney. A bus driver of some 15 years, a grandfather, was driving his bus up a hill with a large number of passengers on his bus—by all accounts, a happy, jovial fellow, well respected by his local community, well respected by his fellow bus drivers—and he looked up to see a barrel of fuel, set alight, roll down the hill on to the bus. One of his colleagues, only months later, had a star picket thrown through the bus window as he was driving the bus, not only putting his life at risk but all those passengers, those young kids who were going to school. I'm proud to say that the union put bans on those areas until it got a proper response from the community, the politicians and the police that it had been calling for for a very long time. That would be illegal under the bill that was being proposed. The unions would have been deregistered over that. Union officials would be terminated from their positions because they had the audacity to stand up and say: 'We need a solution. We need a solution now.' They aren't make-believe examples; they're real-life examples of why laws have to be appropriate. This country is sleepwalking into a crisis of inequality. I reject the new normal, and it's only the new normal if we let it be.

Debate interrupted.


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