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.
I rise to speak on this motion. We've just heard Senator McAllister discuss it. I'm not sure whether you're aware, Senator McAllister, but we've been able to create more jobs, reduce unemployment and reduce inequality over the last six years while we've been in office, so the figures that you refer to actually don't stack up. Anyone who's ever worked outside of government knows that the only game in town which creates employment is private investment. It's been said often in this place that the best form of welfare is a job, and that's why we've always been so focused, throughout this term in office, on creating more employment—because that's the best thing you can do for all Australians.
We've heard a lot about Labor's tax policies, and I think it's absolutely right that we discuss those tax policies, given that the Labor Party is still clinging to enormous housing taxes and retiree taxes. We've heard a lot from 'Sir Tax-a-lot' in the lower house, and $387 billion in new taxes is still Labor's plan. I don't think that's a very good plan for jobs, because you have to accept the fact—and you can't have your own facts—that the only way to create new employment is through private investment, and, if you impose $387 billion in new taxes, you're going to have fewer jobs. But that is still Labor's policy and that's why we take it upon ourselves to remind the Australian people that that is very much still their agenda.
Senator McAllister's address could have been called 'I love unions' or even 'How good are unions?' because, effectively, it was all about the trade unions' agenda. I do feel very sorry that the once great Labor Party have adopted this antibusiness agenda. Everything you hear from the Labor Party is about how much they hate enterprise, how much they're not interested in encouraging private investment—and I can run through the list. In the last five or six years, Labor have opposed trade deals. In fact, when Labor were last in office, they were unable to conclude the trade deals with China and Japan that the prior, Howard government had commenced, because the unions said they weren't allowed to do trade deals. Again, Labor are opposed to tax cuts or any measure to make the economy more competitive. That is because, at the end of the day, the unions are isolationist. They're not interested in trying to grow the pie or trying to improve private investment. They're only interested in their own jobs—and I'm referring here to the union bosses.
The list goes on of how the union movement writes the Labor Party's economic policy platform. Labor policy is to abolish the Building and Construction Commission—rather extraordinary, when you consider that the people that the Building and Construction Commission is supposed to rein in are people who say they're going to come round to footy clubs, come round to people's homes, and 'get them', referring to government officials. So that's quite extraordinary. At the last election, we saw Labor's tax policies were still being drafted by the unions, drafted by various parts of the financial industry.
We saw today a very good report from the Property Council saying that the economy would have been much smaller if Labor had won the election, and there would be vastly fewer jobs. Once again, these tax policies, these economic policies drafted by the unions, are fundamentally antibusiness; and, if you're in the business of trying to create employment, these policies are the last thing the country needs. Our plan in government, other than trying to fix the fiscal mess the Labor Party left to us, has been to try to cut personal taxes, and that's what we've done in the past few weeks. But we've also sought to do trade deals and generally try to make the economy much more competitive, because at the end of the day the only game in town is private investment. There is no other way to create jobs.
There is of course much more to do, and that is why we have announced a review of industrial relations. The PM made it clear when this was announced in Perth around a month ago that he was asking Christian Porter to take a fresh look at how the system is operating and where there may be impediments to shared gains for employees and employers. The PM said:
Any changes in this area must be evidence-based, protect the rights and entitlements of workers and have clear gains for the economy and for working Australians
That is an opportunity for us to look again to improve the economic landscape in this country by looking at practical issues in workplaces, not pursuing any ideology or any other agenda but looking at how we can improve workplaces so that we can create more jobs—more jobs in big businesses, more jobs in small businesses, more jobs in the private economy. That has been our focus and our aim since we've been in office, since 2013.
There is also more to do, and the trade minister, Senator Birmingham, is currently abroad, trying to deliver the RCEP trade deal. If we were able to conclude that, it would be another feather in our cap in terms of being able to deliver a very significant trade agenda. When senators opposite say that we have no economic agenda, it's obviously a case of short memory, because, frankly, there's been no other era that has been able to deliver a slew of bilateral trade deals with enormous trading partners—China, Japan, Korea and Indonesia—while simultaneously being able to deliver large multilateral deals as we did with the Trans-Pacific Partnership, which the Labor Party said at the time that we shouldn't worry about, because the incoming President of the United States had said he was going to walk away from the TPP. But we worked with Japan, we worked with New Zealand—we worked with our counterparts—and we delivered the Trans-Pacific Partnership. That was on top of these bilateral deals that we were able to do.
And of course now the work goes on. Senator Birmingham is working on the RCEP trade deal, but we're also looking to try to land a trade deal with the EU and with the UK—post-Brexit, of course. The contrast there is that when Labor was in office for six years they couldn't land a single substantive trade deal with these large trading partners in our region. They couldn't do China and they couldn't do Japan, because the unions said, 'No, we don't agree with some quite odd international legal concepts'—known as investor-state dispute settlement, and I'm not sure that the unions actually understand that this has been designed to promote trade and investment. We on this side are not isolationists. We welcome foreign investment. We welcome all forms of foreign investment that are in our interests—subject, of course, to all security screening and good governance.
I do want to run through some data, because this motion before us is full of errors. The latest ABS employment data show that we have experienced 11 consecutive months of employment growth, and that's good. And welfare payments are the lowest, as a share of the working-age population, that they've been in a generation. So, we've got more people in work and fewer people on welfare. Inequality has also reduced under the coalition, from 0.304 to 0.302. That is also a good step in the right direction. But overall we have focused our efforts on job creation. We have focused our efforts on trying to get private investment up. That's why we've sought to do trade deals. That's why we have cut taxes. That's why we have a plan to, again, ensure that workplaces are calibrated so that more people in this country can get a job.
At the end of the day, we can talk about the size of government all we like, but we are a nation that has always relied upon foreign investment and private investment for our prosperity. That being the case, we need to run a competitive economy, because we don't run on the good graces of the rest of the world. We need the rest of the world more than the rest of the world needs us. That's why it has always been important to promote a competitive economy, one that is open and dynamic, and one that is always looking to attract job-creating foreign investment and to create the best conditions for domestic private investment to create those jobs.
When we consider the summary of the other side's efforts—they don't like trade deals, they don't like tax cuts, they're too afraid to discuss any other economic reform and they want to put in place enormous new taxes which are, frankly, risky and would crash private investment—I think it is, again, timely to reflect that we've seen a new report today with detailed modelling showing that there would be vastly fewer jobs in the property and construction sector if there was to be a housing tax imposed. But then, if you just reflect on the logic for one moment, whoever would have thought that a new tax could create new houses? The logic is just so crazy. It is odd that this is the sort of logic which is promulgated on the other side of the chamber. I look forward to them coming to their senses in future years, potentially. But if, all the while, you have the view that more tax will create more houses, then I think you're in quite a difficult place intellectually, and, as it's often been said: you can't have your own facts.
I can't help but laugh at the Orwellian phrase, 'the best form of welfare is a job'. Because what this leads me to believe is that the government might think someone has to go to a Centrelink office, they can tick a box marked 'best welfare', and they get a job—I don't think so. I don't think that happens. So the use and overuse of that phrase by this government is something that they say they don't agree with—and that is an Orwellian state. That's what it is.
I rise to speak on Senator Gallagher's motion on the Household, Income and Labour Dynamics in Australia (HILDA) survey. The latest HILDA survey reinforces what many Australians already know: they are worse off today than they were when this now three-term government was first elected. Not only has median household annual disposal income failed to keep up with CPI, it has actually dropped to the level it was at in 2013. Back then, it was $80,208. In 2017, the figure was $80,095. This is just another sign of trouble on the economic front.
Every respected economist in the country has sounded warnings. The Reserve Bank of Australia has acknowledged a weak economy. It has said that wages growth has remained at record lows and that GDP growth has been well below trend. Interest rates are at record lows, and, in the face of the overnight US Federal Reserve cut, there will be pressure for another cut here. RBA Governor Philip Lowe is quoted as saying that 'it is reasonable to expect an extended period of low interest rates'. We can now even envision a situation where interest rates hit zero per cent. Remember, it was also in 2013—the year this three-term government came to power—that former Treasurer Joe Hockey said of an interest cut that had the rate at three times what it is now: 'They're not cutting interest rates because the economy is doing well'. Thank you, Joe Hockey. Interest rates are being cut to 50-year lows because the economy is struggling. With the economy screaming out for help, the RBA is basically out of levers to pull. The RBA is doing its job. It's the government that needs to start doing its own job.
One of my favourite photographs of recent times is the current Treasurer and the RBA governor in a photograph which was almost like a proof-of-life shot—so the Treasurer has the RBA governor there, as a bit of a prop, and it's like the Treasurer is saying, 'No, no, the economy is fine. We've got the governor here, and we've brought him here so that he can say "There's nothing to worry about, move along".' We all know that in fact the RBA has said that our economy is in deep, deep trouble. That is because this government went to an election with essentially one policy—and that was income tax cuts which have now been legislated—and an interesting concept around the housing loan guarantee scheme. So let's see what the contingent liability on that turns out to be.
Of course, this government has been on that side of the chamber and on the Treasury benches for six years. Failing scandal or defections—and don't discount the possibility of those; they are onto their third Prime Minister after all—they will have been there for nine years by the time of the next election. The government could bring forward planned infrastructure spending now. This would give the economy the boost it needs and perhaps stop a further downturn that would only compound the hurt Australian families are feeling as evidenced in the HILDA survey.
But it's not just inaction that's the problem. This government actively pursues ways in to punish Australian workers are already feeling hurt and fiscal pain, and they are trying to maximise that. They've cut penalty rates. There's a protection racket going on for people who are committing large-scale systematic wage theft. They seem desperate to dismantle our world-leading superannuation retirement savings schemes and have an ideological obsession with attacking working Australians' representatives in their unions. Remember: it is those unions that have actually exposed wage theft. So, in fact, they are trying to stop those registered organisations from doing their job and exposing and bringing to light large-scale wage theft, and there have been many cases over the last few years. It's essentially taken a celebrity chef and the public outrage about George Calombaris and the MAdE Establishment group that has made the government think: yes, maybe we should do something about that. But of course we've been through many wage thefts in the last few years in the life of this government where they have done nothing. Those wage thefts include 7-Eleven, the Lush group, Michael Hill Jeweller and Domino's Pizza to name but a few.
Though he was a conservative himself, Winston Churchill's definition of a fanatic fits aptly those who are on the Treasury benches. He said:
A fanatic is one who can't change his mind and won't change the subject.
They see the evidence in front of them that Australian families are hurting and that the economy is tanking, but they won't change their mind. There's nothing to see here; move it along. They have the ability in government to do something about this. They have the levers. They can stimulate the economy, invest in nation building and stop punishing workers, but they won't change the subject. It's the big, bad scary unions, they say.
Mr Morrison's government and his country reserves team of ministers stand here while people literally have to choose whether to eat or pay their power bill so they can turn the heating on this winter. The fact that there are some people who live with such little dignity in our country is a total indictment. The government's answer to whether they will raise Newstart, a payment that hasn't received an increase since the early 1990s, is: 'But these people get other payments, and anyway Newstart's only meant to be a transition payment.' And of course my favourite: 'the best form of welfare is a job' is the common catchcry. It's patronising and it's cruel. These are people who need, in order to get a job, to be able to spend money on public transport and be properly attired for work or for a job interview, but they don't have that option—not on this payment. And, of course, the total disregard for the argument that: if you increased Newstart you would, of course, have a fiscal stimulus because people receiving Newstart would go out and spend that money so that would stimulate the economy and you wouldn't have centres in regional towns where most of the shops are empty.
While there are some of those opposite who seem to lack even the most basic of human compassion, one member of their team seems to have undergone a conversion of sorts, albeit in ministerial exile. The member for New England has this week come around to the idea that many of those on Newstart, those who are doing it the toughest, should receive an increase to their payment. I am not going to denigrate Mr Joyce for arriving at a position of empathy and passion, no matter the path he trod to get there.
I would never refer to a member of this place without the appropriate appellation. This government has been in government for more than 2,000 days. Since 18 May, there's been a majority in this place and, essentially, an effective majority in this chamber. If this government, given it has effective control of both chambers, is serious about helping struggling Australians and kickstarting this moribund economy, there would be ways and means of doing that because if you control the Treasury benches you can actually help people. But I think this government has shown that it has very little desire to do that. These are, after all, the quiet Australians which this government claims to represent.
If this government did care and it did worry about the quiet Australians, it would champion a strong superannuation system that provides income in old age and dignity to Australians in retirement. We now know, because of the actuarial tables, that in fact the 9.5 per cent is not adequate and it does need to rise, and even then there's going to be a bit of a gap. But we do know that superannuation does need to rise. You've got a government that says that it believes in limited government, but secretly they're rather statist because in fact what they are doing is setting people up. For example, Senator Bragg's argument around having voluntary superannuation at some levels of income would set people up to be dependent on the old age pension. That is really a statist solution from a government that says it believes in a limited government. In that example you would make women far, far more reliant on others and on the state, disproportionately with males. And, of course, already we know that one-third of women retire into poverty.
There are members that will be in future leadership positions in this government, and they will be making policy decisions for the government. It was as if they were trying to see who could out run each other. I quoted a former Liberal Treasurer earlier, but let me quote another; however, this one has since become the Prime Minister. Back in 2017, Mr Morrison said that low wage growth was 'the biggest challenge facing the Australian economy'. Let me repeat that: Mr Morrison said that the low wage growth was 'the biggest challenge facing the Australian economy,' and that was in 2017. It's now halfway through 2019, and nothing has happened. This government needs to act on the information revealed in the latest Household, Income and Labour Dynamics in Australia survey, address the declining economy and stand up for working Australians.