Tuesday, 10 September 2019
Questions without Notice: Take Note of Answers
Economy, Women's Economic Security
That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) and the Minister for Foreign Affairs (Senator Payne) to questions without notice asked by Senators McAllister and Watt today relating to the rising cost of living and the economy.
This government is a little bit like the dog that caught the car, isn't it. They went barking and snapping through the election campaign, barking about the Labor Party—and then they won. And, as it turned out, there was absolutely nothing in the bottom drawer. They have captured the government benches, but they have absolutely no idea what to do about the circumstances facing our country. Arguably, there is nothing more important, more critical or more urgent than a national government-led response to the economic circumstances that are facing us. You'd think that would be the priority, coming into this week of parliamentary sittings. But is that what Mr Morrison told us he was interested in? No. Mr Morrison has boasted on this occasion, as he has done on every occasion since he took government, that he is coming into this parliament to set tests for Labor, to play silly games and to construct bills that create wedges for other parliamentarians.
What a sensible, responsible, grown-up government would do is come into this chamber and this parliament with a plan and a serious response to the challenges that face us, because there are very serious economic challenges facing us. But, sadly, there is nothing on offer from the government benches. Economic growth is the slowest it has been in the 10 years since the GFC, wages are stagnant and 1.8 million Australians are out of work or looking for more work. Household debt is high. Living standards are going backwards. We have seen the first per capita income recession in over a decade. Productivity has declined every quarter for the last four quarters.
There is a lot to do, a lot before us, and it is not as though solutions are not on offer. The Reserve Bank governor has been particularly engaged in putting forward his views about what needs to happen. He's urging the government to take action—to bring forward expenditure on infrastructure—and still Mr Morrison fails to act. Seven times since the election in May, the Reserve Bank has called on the government to fast-track infrastructure spending to stimulate the economy—17 times in the last two years. You'd think that would be a wake-up call, wouldn't you? You'd think that would be a message that something needs to be done. But right now the government are sitting on their hands.
Let's be clear about what the Reserve Bank are saying. They are saying that, with interest rates at very, very low levels—a third of what they were during the GFC—the capacity for monetary policy to respond to the conditions is very constrained. Government needs to step in. That is the message that the Reserve Bank is sending the government, and so it might have been the subject for a serious response. It might have been the subject for a parliamentary response, but that's not what we've got. All we've got is endless political game playing.
I guess that's what you get when you elect an adman as Prime Minister. You don't get someone engaged in serious policy problems. You don't get grown-up government. You just get a silly campaign. Unfortunately for all the Australians out there who are doing it tough, who find themselves struggling to pay bills and wondering if they're going to have a job or wondering how to get more work, they'll find no answers whatsoever from the people on the other side of this chamber.
Master Builders Australia were out there today. In the last little while, the excuse offered by the government for why they can't do anything to bring forward infrastructure funding is that there are constraints. Well, they've absolutely belled the cat on that one, haven't they, because Master Builders Australia have made it very clear that, yes, there are some constraints—constraints in Sydney and Melbourne. But in a range of other sectors there is plenty of capacity and there is the opportunity to stimulate the economy in our regions—in places other than Melbourne and Sydney. For a government that prides itself on its work in, and likes to talk a big game about, the regions, it is incredible that that advice from Masters Builders Australia isn't being heeded. It's the same advice, incidentally, that the government has heard from the RBA—that there is room to stimulate the economy.
Why won't they act? It's because they have no plan. They have no vision. They are stuck with an economic textbook somebody gave them in 1980, and they don't have the imagination to adapt themselves to current circumstances. They're playing political games instead of dealing with the very real economic challenges that face us now. (Time expired)
It is terrific news to hear that those on the other side know that there are other regions apart from Sydney and Melbourne—very exciting news! The Australian people, when we went to the last election—the one on 18 May, where they made a very clear decision—decided that they wanted no part of the economic management that was put forward by the Labor opposition. They made it very clear that they did not want hundreds of millions of dollars in new taxes. They made it very clear that they did not want an economy based around unachievable renewable energy targets. They made it very clear that they did not want the economy smashed and jobs snatched from Australians by the opposition's plan. What they did want was a sensible, practical economic plan, which was presented by Morrison and this government. What they got is a government that has provided certainty and stability.
They got a government that does have a plan—a plan that was taken to the Australian people, a plan that was put forward in the budget earlier this year and a plan that foresaw that Australia did have challenges that it was going to face, and the government was steadfastly getting on with implementing that plan. The proof of that plan and that it is moving forward is the Australian people's acceptance and understanding that there are challenges ahead, and that we have just seen that the Australian economy has completed its 28th consecutive year of economic growth—a record that is unmatched by any other developed economy. The proof is on the scoreboard; we just have to look at those numbers to understand that this is an economy that has survived despite economic headwinds. It is a reminder that it is important that we continue to talk positively and support those businesses who are out employing Australians, who are providing real jobs, who are providing the taxes and who are providing the services that we so enjoy. It is important to talk up that resilience and to repudiate all of those who've sought to talk it down.
In the June quarter, real GDP grew by 0.5 per cent to be 1.4 per cent higher through the year. In year-average terms, real GDP grew by 1.9 per cent in 2018-19. It is slightly below the budget forecast of 2¼ per cent, but that is also in year-average terms. It is important that we remember that it is Australians who build the economy. It is Australian businesses that employ people. Labor lacks flexibility and lacks understanding of the risks that Australians make in operating these businesses and employing people. These Australians need to be recognised and need to be supported, and their decision to support the Morrison government is one that should not be disregarded. The Morrison government had a clear plan to take to the economy—one that we're delivering. As I said before, it is about certainty, it is about stability and it is about having a plan in the face of a challenging world environment, but one that we knew was coming, with a plan that we are clearly working towards.
This contrast is between a stable, united government getting on with the job with a clear plan delivering on promises that were made and a Labor Party that is conflicted on policy and tarnished by scandal. It's about certainty versus uncertainty—stability and predictability versus chaos and confusion. Labor just doesn't seem to know what it stands for or who's side they are on, which means you don't know what you'll get from one week to the next on tax, on the budget, on border protection, on union power and on work over welfare. Labor can't tell you what they believe or whose side they're on. There is no certainty and there is no consistency.
It's interesting to note that Senator McDonald couldn't even finish her five minutes of allotted time right through. I listened to that contribution and I thought: Well, hang on a second: you're in government! We're asking you a legitimate question, which is asked by a lot of commentators in the economic space.
You're looking at an economy which is faltering. You're looking at an economy that's got some positivity in the minerals sector, which has been buoyant and which has kept the place afloat. If that doesn't continue, what are your plans? Their plans are that somehow or other it's the fault of the Labor Party's policy. You've been in government for six years; have a look down the bloody path. Where are you going economically? A legitimate question was asked, I think last night, of the Prime Minister: 'Are you actually compounding the problem here by chasing a surplus in a stagnating and flat economy? Are you actually going to drive a bit of a recessionary impact by chasing a surplus at all costs?'
We all know a surplus in a rising economy is the Holy Grail. Every household knows that. If you have more coming in and you put a bit aside for a rainy day, that's the Holy Grail. If you have less coming in and you have to buy less or do less to put a bit aside, that's not the Holy Grail. In an economy as large as Australia's and with the impact that this government has on the economy's spending, if you're chasing a surplus at all costs so that you can tick a box saying, 'I wanted a surplus,' and it is actually impacting negatively on the economy, that's dumb.
Senator McDonald hinted at chaotic policies on this side. I don't think we have to go back too far to see the chaos that the Morrison-Abbott government was creating in the community; it was rampant right across. It's true you won an election on 19 May, but don't blame us for your lack of activity in the economy. We are the opposition. We're asking legitimate questions. What are your plans? What are your plans for stagnant wage growth? What are your plans for declining new car sales? What are your plans for declining activity in the building sector? What are your plans right across the whole economy?
It's true that we've had 28-plus years of uninterrupted economic growth, and some commentators would argue that a lot of that is attributable to our reasonably high levels of immigration. Immigrants come to this country and contribute effectively from day one. They build stuff. They buy stuff. They are very beneficial to the economy. This government is looking at lower forecasts for immigration. So you have a fixation with a surplus at all costs, declining economic indicators across many facets of the economy—buoyed only by the mining sector—and a projected lowering of the immigration levels. All of these could well create the circumstances where, unfortunately, we go into a recession—two quarters of negative growth.
Our indicators are not that high at the moment. We're not going that well. When we ask legitimate questions about what this government's plan is, their plan is, 'Well, if you lot were in power, it'd be worse.' I have to say that that's not a plan. Is that the plan that you're going to take to people when they're thrown out of a job? If 750 people lose their job at Virgin or if other companies start laying off people, the plan the government has is, 'Well, don't worry, because if the Labor Party were in power you'd be hurting more.' You've been there for six years. You have another three years to go. What is your plan if this economy tanks, nosedives? Are you going to remain fixated on having a surplus at all costs and punish everybody who falls down in the economy, with no plans of floating a bit or putting a bit of expenditure here or there?
Infrastructure is the classic place to stimulate a flat economy. You have no plans to increase that. 'Oh, we're doing well on that. We're doing well here.' There are plenty of independent economic commentators saying that there are enough warning signals here—flat, declining wage growth; new car sales are down; the building sector is down. Around you, there are enough signs to say that you should have a fiscal plan. When we and other commentators ask, 'What are you doing?' you should have a competent answer, not say, 'You lot were going to be worse.' (Time expired)
I will acknowledge that Senator Gallacher is the first one from those opposite who actually acknowledges the fact that there was an election a few short weeks ago and that the Australian people spoke. The Australian people spoke extraordinarily decisively on the two competing economic policies up for grabs. They had a policy of the politics of envy—big government, socialism—from those opposite, and from this government they had a very clear plan for keeping the Australian economy strong and resilient in the face of some serious international economic headwinds. The only people in denial in this place are those opposite. They're in denial about what happened a few short weeks ago, when the Australian people spoke. The verdict of the Australian people was very clear. We took a plan to the election, a plan that—as I read out in this place yesterday from a media release from the Treasurer, Mr Frydenberg—outlined the economic headwinds that Australia faced. It was a media release, from before the last election, that set out this government's plan to address those issues, to keep those 28 years of economic growth on track, for the future, to see our economy keep growing, to lower taxes, to keep funding those essential services that Australians require, to keep people in jobs, to grow jobs. It was a comprehensive economic plan from this government.
What do we hear from those opposite? We hear about floundering. We hear about faltering. We hear about stagnation. But, more than anything else, we hear them falling back into that sad, old pattern of the politics of envy, where they always go when they're in trouble. It's the politics of envy. This government is delivering. It's delivering on the $100 billion infrastructure plan over the next 10 years. There are a record high number of people in jobs. Unemployment rose in the latest quarter, in May of this year, by 42,300 to a record high of 12,868,000-plus jobs. Do those opposite ever talk about jobs? Of course they don't.
Jobs growth is fundamental. It's about reducing the number of those on welfare. We want to have fewer people on welfare and more people in work, which is exactly what this government has been delivering over the last six years. We took to the Australian people a very clear plan for keeping on delivering those new jobs into the Australian economy and continuing to see fewer people need the support of government via income support. There are 230,000 fewer people dependent on income support than four years ago. That is an outstanding result. That is 230,000 individuals—hundreds of thousands of families—who have moved from the welfare system into work and who are now playing an active role in the Australian economy. The full-time unemployment category now accounts for almost 74 per cent of the employment growth over the last year. We're putting people into full-time jobs. Business is giving people the opportunity to gain access to those full-time jobs, which is the best thing that an economy can give to someone—to get them out of the welfare system, to get them out of dependency on government assistance and get them into a job.
As seen recently in the HILDA Survey, mean disposable household income rose to $55,200 in 2017, up from $54,680 in 2016. In fact, it's the largest increase in mean disposable household income since 2013. Wages are growing at the highest rate since December 2014, at 2.4 per cent. Inflation is currently 1.3 per cent. We've seen that private sector wages are growing at their fastest pace in four years. So, once again, we see those opposite falling back into a level of confusion, of floundering, of faltering themselves, as they don't know where to go following their election defeat. They fall back into the politics of envy. They deny the verdict of the Australian people a few short weeks ago.
One of the things I've noticed over the course of the last couple of months—I've been in the Senate for just a few moments, really—is the refusal of those opposite to acknowledge the basic facts in the Australian economy, a refusal to engage with the real issues. As I said yesterday, that really is a precondition for being effective: acknowledge what the problem is, work out what the sources of the problem are and then act.
The truth is, wage growth is at its lowest level in recorded history. Since wage growth has been measured, we haven't had a period where it's grown so little. In fact, we've achieved a small economic miracle in the Australian context. We've got skills shortages and low wage growth. We've got unemployment hovering, stubbornly, between five and six per cent, skills shortages and low wage growth, all at the same time. That isn't supposed to be a feature of a modern economy, but I think it's becoming the new normal under the Abbott-Turnbull-Morrison government. It shouldn't occur.
Profits have been rising around 4.5 per cent over the course of the last quarter, but wages have grown at half or 25 per cent of the rate of profit growth over the last couple of years. It is true that profit growth is more volatile, and you can't look at quarter-by-quarter measures of firm profitability. And it is important that Australian firms remain profitable over a sustained period of time. But what's happened, clearly, over the course of the last period is the wage-profit share—the wages share of the economy—has declined year on year on year. There are serious consequences for our economy and for our democracy if that continues to occur.
As I said before, skill shortages and unemployment remaining where it is are the conditions where the economy and workers ought to be banking wage increases. It's the right time in the economic cycle for workers' wages to rise and for people to build a decent standard of living. We are missing an opportunity to build incomes and the wealth of ordinary Australians because of the government's wilful blindness on these questions. There is no wages policy. In fact, the only alternative that's been offered is that the current settings are a deliberate design feature to keep wages low. Despite the Leader of the House's denials, you'd have to say that that is the logic of the industrial relations system from 1996 to 2019, with hyper-regulation of collective bargaining and denying people the capacity to effectively bargain and to lift their wages.
We are operating in an environment where every economic indicator is pointing in the wrong direction, with vehicle sales down, retail turnover down, labour productivity down, household debt up and GDP growth decreasing year on year. In fact, some economists say that we're in a per capita recession. Apparently that is cause for celebration on the other side. Job ads are down, household income is down, underemployment is up, the long-term unemployment rate over the course of the last few years is tracking up and electricity prices across the National Electricity Market are tracking up 158 per cent. These are all domestic factors that the government has some control over, that the government should have a policy to deal with. The government's only plan is politics and to point the finger at global economic headwinds.
I appreciate that there is not a yachting analogy that the crowd opposite wouldn't love to get hold of, but it's not an excuse for economic failure. It is not an excuse for a policy agenda that has run out of steam. It is time that the government turned up to the parliament with a plan that is about the economy and jobs and not just about politics. (Time expired)
Question agreed to.