Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

I rise to make a contribution on the 2020-21 appropriation bills being considered by the Senate today, Appropriation Bill (No.1) 2020-2021, Appropriation Bill (No. 2) 2020-2021 and Appropriation (Parliamentary Departments) Bill (No. 1) 2020-2021. Put simply, the budget contained in these bills is emblematic of the coalition government's abject failure of economic vision and of its fiscal management over its entire time in office. Years of Liberal economic mismanagement and inaction on reform meant that Australian households, our economy and the federal budget confronted the very serious challenges and uncertainties of the fire season and the COVID-19 pandemic from a position of weakness, not strength.

The facts here cannot be disputed. Even before the virus and the worst of the fires hit, under the Liberals' watch Australian families were struggling and the broader economy was floundering. The national accounts, prior to the unprecedented events of 2020, exposed the full extent of the Liberals' failure. Quarterly growth had slowed to 0.5 per cent in the December quarter, down from 0.6 per cent in the previous quarter. Annual growth was well below trend, at 2.2 per cent, and was already a full percentage point below what it was before Mr Morrison and Mr Frydenberg took over. The private economy did not grow at all in the quarter and had stalled for the entirety of the preceding year. Growth in annual consumption had declined to its slowest pace since the global financial crisis. Total private business investment was in reverse, having now declined for three consecutive quarters, and was down 1.4 per cent over the year. As a percentage of nominal GDP, it's around the lowest level since the early 1990s recession. And wages growth had been stagnant for some time. Quarterly growth in average compensation per employee had slowed even further in the December 19 quarter, despite Australians already experiencing the slowest wage growth ever recorded.

The nation's finances had not fared any better under three Liberal prime ministers and three treasurers. It cannot go unremarked upon that Mr Morrison, in the other place, was the Treasurer for three of these years and the Prime Minister in the lead-up to the pandemic arriving on our shores. For the last seven years, the coalition government promised to deliver surplus budgets and to pay down debt. In reality, this government has broken its promises to the Australian people every single year. Instead, they had doubled debt and delivered six budget deficits, even before the pandemic hit. This is the context in which the Morrison government's 2020-21 budget must be considered.

Turning now to the budget presented in these appropriation bills: the government has delivered a budget that, despite containing record levels of spending and charting a course to more than $1 trillion of debt, fails in its most pressing duty. It fails to create jobs for Australians and fails to build for their future. It does contain a lot of headline-grabbing names, as we've become used to during this pandemic, like JobMaker and JobTrainer, but the problem is that not many jobs are being created. In fact, the latest labour force figures out of the ABS told quite the opposite story—the story that Mr Morrison and Mr Frydenberg didn't want you to hear. The story was that 25,000 more people actually lost their jobs in October, taking the unemployment rate to seven per cent.

Put simply, this is a budget that focuses on announcements for the Prime Minister but which, in reality, leaves way too many Australians behind. As I just noted, not only will this budget deliver in excess of $1 trillion of public debt and $98 billion in spending but it keeps the amount of people without jobs too high for too long. It contains record levels of expenditure but leaves so many Australians behind without the support they need to make ends meet, without certainty and without any hope. Perversely, it prioritises the funnelling of billions of dollars of taxpayers' money into funds specially set up for the coalition government to rort and pork-barrel at the expense of hardworking Australians. And it ignores the enormous social and economic opportunities of addressing key policy areas, such as child care, aged care—in desperate need of reform—and, of course, social housing, a great way to drive jobs and to provide a lasting social benefit for so many Australians who are doing it tough.

This year's budget demonstrates a staggering lack of ambition on behalf of the Prime Minister and the Treasurer. If we look at the numbers contained in these bills—and against the backdrop of the memorable lines from this lot, lecturing year after year about debt-and-deficit disaster and a budget emergency, and who promised a surplus every year, to pay down debt and to get debt under control—they show that we'll have a deficit of $213.7 billion this year, the largest dollar-value deficit ever. There will be almost half a trillion dollars of cumulative deficits over the forward estimates, deficits as far as the eye can see, with the deficit never getting below $50 billion in any year over the median term—that is, up to 2030-31. We see debt rising to $1 trillion and net debt this year at $703.2 billion, growing to $966.2 billion by the end of the forward estimates. This is after this government inherited net debt in the order of $180 billion when it came to office. Gross debt this year will reach $872 billion, growing to $1.1 trillion by the end of the forward estimates and peaking at $1.7 trillion over the median term. There's also $98 billion in new spending in this budget, all of it structurally built into the budget—not offset, but contributing to spending as a proportion of the size of the economy being higher in every year of the forward estimates and the highest in nearly 40 years.

The staggering figures in this bill don't stop on the fiscal side of things. The economic numbers are deeply concerning reading too: record low wages growth set to continue, stagnating below two per cent until at least 2023-24; and high and worsening unemployment heading into Christmas this year, peaking at eight per cent in December 2020 and falling to 6½ per cent at the end of 2021-22 but not falling below six per cent until the end of 2023-24. It's at this point that the government has signalled it will begin its job of budget repair. Time will tell what this really means, but I do think it's interesting that it seems the government has decided that a six per cent unemployment rate—or comfortably below it; we tried to get to this in estimates—is the point where significant budget savings will be made to return the budget to order. That will still leave hundreds of thousands of people sitting on the unemployment queues. In addition to these figures, the Reserve Bank has recently said in its Statement of Monetary Policy that GDP won't reach its pre-pandemic level until at least 2021, that wages growth will be low for a considerable period and that employment won't return to its pre-pandemic levels until 2022.

When we consider the budget and the wider economy in these terms, the picture is definitely a sobering one. Quite often we have these economic discussions in terms of numbers, using numbers to tell the story, but the story for so many Australians at the moment is one of worry, of hardship and of a very, very difficult year, and of concern that next year is going to be just as hard, if not harder. It's the human story behind these numbers that really should focus the mind of the government because it's about the people who are relying on JobKeeper and on JobSeeker, and about the two million Australians relying on the coronavirus supplement to help them get through. It is about young people leaving university and school and wondering how they are going to start their careers with the impact of high levels of youth unemployment. It is, for older workers who have lost their jobs, the thought that they won't be able to get into new employment or that new employment opportunities won't be for them. It's the worry of people who have been living on the pension as they raise children. It's the ones whose rent is more than they can afford and who are at risk of losing their house and can't afford the mortgage. It's all of these stories that should focus the minds of us in this place and that we should all commit to caring about and tailoring solutions for available to the national government to make sure that their needs are supported.

You would think that with all of this economic data, with the story that's provided through the economic forecasts and with the policy response from the government we would see more of an effort being made to battle some of these serious system failures that we have, particularly in aged care. We would use this opportunity where we are spending billions of dollars to try to leave a lasting legacy for those who will have to pay down this debt. It is about making sure women are able to return to the workforce and that they're not prevented by policy settings which discourage them from working or make it impossible for them to take on an extra shift or an extra day.

If we look at what the Department of Social Services were saying when they updated a recent committee hearing—I think it was at estimates—they are expecting 1.8 million Australians to be relying on unemployment support by the end of the year. This is happening at the time that the government has decided to reduce financial support to this group of people and, indeed, end financial support through the extension of the coronavirus supplement in March 2021 at a time when we have millions of Australians relying on those payments.

Labor have been clear from the beginning on the economic response. We are not criticising the government for spending money where it is needed, but we have been critical about the quality of the spending. We have been critical of the government setting up these funds. Depending how you count it, between $5 and $7 billion worth of funds have been established for ministers to allocate expenditure from. Many of these funds in history have conveniently preferenced coalition seats, either targeted or marginal, and we are concerned about money being funnelled that way without proper scrutiny, with ministerial pens approving large amounts of taxpayers' funds to go to particular projects for particular parts of Australia at a time when every dollar spent is a borrowed dollar. So we will continue to focus on the quality of the spend and making sure that every dollar that is borrowed is being used to support Australians, whether it's to create jobs, protect jobs or support families to put food on the table and pay bills. That is the focus we want the government to have, because it's Australians that deserve their priority attention, not their political outcomes.

This budget has finally put some flesh on the bones of the JobMaker plan. This was announced, as people might not recall, months ahead of the October budget, but no-one seemed to know what it was meant to do, how it was meant to do it or who was in charge of it. It took about four months for the detail to be provided and $74 billion of the measures out of the government's expenditure in this budget focused on the JobMaker plan, whether it be through the hiring credit or some of the other initiatives, such as to try to increase business investment, infrastructure spending or the manufacturing strategy. Time will tell whether this emphasis through JobMaker actually delivers the outcomes we need to see. We know that they've been dodgy on the numbers in the past. We saw the Prime Minister on the weekend again saying that HomeBuilder had supported a million jobs in the construction industry. But we know the Treasury has a very different view of the jobs numbers that you can attach to the HomeBuilder program.

For the JobMaker hiring credit, again, the government used the figure in their budget of a million new jobs, and 450,000 of them were supposedly created through the JobMaker hiring credit. When proper scrutiny was brought to this number, the Treasury admitted that, in terms of additionality, they thought the JobMaker hiring credit would create approximately 45,000 new jobs. That's just 10 per cent of what the government has detailed in their budget papers.

From the opposition's point of view, we will be closely watching this. We'll be closely watching the quality of the spend and the government's claims about the number of jobs that these programs funded by taxpayers actually deliver. We will be making sure that the government is not withdrawing support too early from too many Australians who are relying on it. If we think of the 1½ million Australians receiving JobKeeper, the 1½ million Australians on JobSeeker and the two million Australians who are getting the coronavirus supplement, I think that sends a pretty strong message that there are millions of people in Australia relying on this government to do the right thing by them and not withdraw the money too soon. I move:

At the end of the motion, add: ", but the Senate:

(1) notes the 2020–21 budget:

  (a) will deliver a decade of deficits and accrue one trillion dollars of debt,

  (b) spends $98 billion but keeps unemployment too high for too long,

  (c) continues to leave too many Australians behind without support,

  (d) fails to address key policy areas such as childcare, aged care and social housing,

  (e) fails to outline a vision for the country, and

  (f) prioritises the funnelling of billions of taxpayers' dollars for the Morrison Government to rort and pork barrel at the expense of hard-working Australians; and

(2) calls on the Government to provide appropriate levels of resourcing to the Australian National Audit Office so that they can maintain audit scrutiny throughout the economic crisis."