Marise Payne (NSW, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Administration and Leader of the Government in the Senate, Senator Minchin. Will the minister inform the Senate of the important role that good economic policy can play in reducing poverty and expanding opportunity for low-income Australians, particularly in light of the fact that this is Anti-Poverty Week? What steps has the government taken to address poverty and income equality in Australia?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank Senator Payne, and I acknowledge that today is the UN’s Anti-Poverty Day. I noted last week that running a strong economy is probably the most important responsibility of any national government. It is a fact that the main beneficiaries of such a strong economy are those most vulnerable to any downturn. On this side of the chamber we have always held a view that the best and most effective form of social security is giving someone a job. One of our proudest achievements in government is that since we came into office almost two million new jobs have been created. As I noted earlier, the unemployment rate has fallen from 8.2 per cent, when we came to office, to a 30-year low of 4.8 per cent. That has occurred at a time of rising real wages. Real wages have gone up by 16.4 per cent over the last decade, compared to a rise of just 1.2 per cent over all of the previous 13 years.

A strong economy gives governments increased resources to address those in need. Real spending on social security and welfare has risen by 35 per cent since this government came to office. It should also be noted that the strong economy and changes to tax law have seen a big growth in private philanthropy, which now amounts to some $11 billion a year, double what it was when we came to office. Our policies remain highly redistributive. Recent research by NATSEM found that, before any intervention by government, private earnings of the top income quintile are 43 times higher than those in the bottom quintile. Once you take account of tax and benefit programs, that ratio falls from 43 to one, to three to one—a remarkable narrowing. The Bureau of Statistics has also shown that the wellbeing of low-income households has improved over time relative to the wellbeing of high-income households. Between 1994-95 and 2003-04 the real income of high-income households grew by 19 per cent but the real incomes of low-income households grew by 22 per cent, thus narrowing the gap. One of the factors in that has been our very successful and popular $600 per child family tax benefit lump sum. The Labor Party embarrassed itself at the last election by claiming that was not real.

We acknowledge that, while a lot has happened over the last decade, we want to do more and there is more to be done. One of the sobering statistics is that 67 per cent of households where no-one has a job are sole parent households. In around half of those cases the youngest child is older than five. That is why our government is actively investing in improving job prospects for sole parents, encouraging them to seek part-time work.

We should not forget the social policy dimensions in addressing poverty and income inequality. All our efforts to strengthen marriage are aimed at ensuring that children get a chance at a job and at a sound and prosperous life. We strongly believe that a sound grounding in basic literacy and numeracy is really important for that. You can do that only if you have a strong economy and a sound budgetary position. The experience of the last decade shows conclusively that a strong and flexible economy, creating jobs, generating high real wages and supporting a strong safety net is a fundamental prerequisite for addressing poverty and income inequality.