Senate debates

Wednesday, 16 October 2019

Questions without Notice: Take Note of Answers

Economy

3:17 pm

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

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) to questions without notice asked by Senators McCarthy and Gallagher today relating to the Australian economy.

What we've seen today from the government is more denial that any of the issues facing the Australian economy have anything remotely to do with them. This is despite six years in government and three terms. Whilst we've had a stable finance minister through that time, we've had a number of different Prime Ministers and a number of different treasurers. The evidence is mounting, I think, from experts—not just from Labor but from the RBA, from eminent economists across the country and now from international groups, such as the IMF and the WTO—all raising concerns around growth in advanced economies and more broadly, and here we have a government that is in stubborn denial in its refusal to actually do anything about it.

The latest document from the IMF—and this relates to the questions that Senator McCarthy and I asked today—has rung the alarm bells again around what's happening in the Australian economy. We've seen a very significant downward revision of expected growth. We've got a whole range of other economic indicators that have come out since the election, and the government continues to refuse to take notice of them. We've got the lowest level of growth since the GFC. We've seen the living standards of Australian families in decline. Every day you listen to the radio and there's another report. Whether it be around food insecurity, paying the bills or lack of wages growth, the real impact on families and households across the country is being reported on a daily basis. We have more than 1.9 million Australians who are looking for work or for more work. We have a staggering level of household debt, at 190 per cent of disposable income. Yes, while we've had tax cuts, the evidence to date—and I know the government is placing a lot of emphasis on next quarter's results—would show that people are using that money to pay down debt. They are not spending it to support growth across the economy.

We have business investment contracting, we have consumer confidence declining, consumption growth is weak and productivity is in decline. These are all facts. This is all what is happening, and we have a government that just says nothing about that. They say: 'No matter! The plan we took to the election, despite a lot of these results coming out post the election, is on all track.' The evidence is mounting that that is not the world in which we are living. That is not the world in which Australians are living. They are working harder and they are working longer but they are going backwards. That is the reality. You talk to absolutely anyone and you will not get a story of: 'Oh, it's all great. We are very confident the tax cuts are going to help us.' It's a very different picture.

Childcare costs are going up. Electricity costs are going up. Managing to afford the extras is impossible, because wages aren't growing, costs are increasing and there is uncertainty about what is going to happen in the future, and the government isn't offering any hope or any plan. It's not good enough to rest on what you promised last year or in the lead-up to the election anymore. People want to know that you have your hands on the levers and that you are listening and acknowledging the reality of the world in which they live. That's the job of the government. It's not to be stubborn and point the finger and say, 'It's all Labor's fault that this is happening,' despite our not being in federal government for, unfortunately, some time. That is not what the Australians who even voted for you and those who didn't vote for you want to hear. They want to hear: 'We are aware of the world in which you are living. We are aware of the pressures. This is what we are going to do to assist you to respond to it.' We are not getting that from the government at all.

We accept that you will point the finger at Labor. That's part of the show and the game that we play in this chamber. But, in all fairness, when we have the results that we've seen and the concern that we've seen and the lack of confidence and uncertainty going forward, it's the responsibility of this government to stand up and respond to the current situation—not to point the finger and blame but to accept the data, the evidence and the expert advice that is coming and respond to it. (Time expired)

3:23 pm

Photo of Susan McDonaldSusan McDonald (Queensland, National Party) Share this | | Hansard source

I rise to take note of the debate, and in particular I imagine that it's probably not unusual to expect that Labor will continually talk but not listen. I think that the Prime Minister and leader of the Senate have said on several occasions that our government has provided certainty, that we are seeing stability. We have a plan that we took to the Australian people, a plan that we put in our budget, a plan that foresaw these challenges that Australia was going to face. We are a government that is steadfastly getting on with implementing that plan.

I guess we shouldn't be surprised that Labor is a group who wouldn't understand the challenges of business, who wouldn't understand how serious these challenges are and that these are expected challenges. The IMF has noted that the global economy is in a synchronised slowdown. It has downgraded global growth for 2019 to three per cent. This subdued growth reflects trade and political uncertainty, which is weighing on confidence and investment, and Australia is not immune from these challenges. Nevertheless, we remain well placed to meet these headwinds.

In 2019, Australia is forecast to grow faster than any G7 economy except the US, while Germany, UK and Singapore have had negative economic growth in the June quarter. Jobs growth of 2.5 per cent through the year is stronger than any G7 economy and more than double the OECD average of 0.9 per cent—compared to 0.7 per cent in 2013. We do have a strong budget position that supports our economic resilience. Our budget is back in balance, whereas major advanced economies are averaging deficits of 3.8 per cent, and we're paying down net debt currently around a quarter of the G7 average.

But again, I don't expect that Labor would understand the challenges to business and the economy; it is not in their DNA. In fact, when Senator Ayres rose to ask a question regarding regional unemployment in the great state of Queensland, my home state, I was amazed that he did not understand that unemployment in regional Queensland is a direct result of what happens when you have a Labor government. It is the Labor government in Queensland that has raised the state's debt to a shocking $90 billion. That is just an extraordinary number and a massive noose and weight around the neck of our state. It is a state that is spending more on public servant jobs than ever before. It is a state that provides no certainty to business. It is a state that increasingly regulates for any activity that businesses are trying to undertake. It is a state that constantly moves the goalposts, whether it be on mining projects or—incredibly shockingly in this time of drought—Emu Swamp Dam. That is a dam that is needed urgently, critically, for the Stanthorpe area, yet the state government continues to play games. It is the state Labor government in Queensland that doesn't understand how to get jobs going, how to get certainty going, how to get growth going. I am surprised that Senator Ayres would raise that, because it is my very dear ambition that we remove the state Labor government in Queensland because it is doing no good for our state. We know that that is where uncertainty and bad economic outcomes happen—when businesses are not able to get on with the job of employing people.

The economy is not some beast that magically sits in the corner of the room. It is something that happens when small businesses, big businesses and people take out a mortgage, they take a risk and they employ somebody else. It is hard work. It is the sort of thing where you go to bed with a stone in your stomach. Small businesses are the backbone and the engine room of this country, and yet Labor's policies that they took to the election would have provided increased electricity prices, increased uncertainty, massive new taxes and increased debt for this country. So on those notes, I urge Senator Ayres to work with me to remove the state Labor government in Queensland.

3:28 pm

Photo of Jenny McAllisterJenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | | Hansard source

For a party that claims to be big on the idea of individual responsibility, this government is surprisingly resistant to taking responsibility for its own actions. It is always somebody else's fault, never the fault of the people over there. It's the unions, Greta Thunberg, the Public Service, the states, the crossbench; there's always somebody else to blame. Their talking points—helpfully distributed to the entire press gallery and then pretty much to every other person in Australia on Monday—were littered with references to the Labor Party. Six years in, their talking points talk only about the Labor Party and our previous policies, despite the fact we are not in government and have not been in government for six years. So it's no surprise to hear Minister Cormann claim that responsibility for a downgrade to Australia's growth forecast lies somewhere else—pretty much anywhere else except with him and the government. But, unfortunately, that is just not true.

Today the IMF released its World economic outlook, which substantially downgraded its forecast for Australia's economic growth. The report shows the hollowness of the government's claim that they are managing the economy 'just fine, thank you very much'. Instead, the IMF's analysis reinforces what we are seeing in multiple indicators across the economy. It is the slowest economic growth since the GFC 10 years ago. Household debt is at record highs. There are more than two million Australians unemployed or underemployed. Business investment, which people over there are skiting about, is the lowest it has been since the 1990 recession. Now, the government and Minister Cormann would like to blame this on global economic headwinds, but the truth is that that answer does not stack up. Australia's downgrade is larger than that for global growth and four times larger than that for the eurozone and the advanced economies as a whole. Our performance cannot be explained as merely part of the global headwinds, because it is so much worse than the averages in the countries we would normally compare ourselves to.

The coalition have been in power for six years now, and during that time they have overseen a stark deterioration in Australia's economy. This is not something that is happening in the abstract. Ordinary Australians have seen their wages stagnate whilst the cost of living goes up, and it is time for the government to take responsibility. Now, that may not be politically convenient for the government and it may not fit the chief marketer, the Prime Minister, and his clever messaging strategy, but the government cannot pretend any longer that there is no problem. It is time for them to act.

The Prime Minister, in response to all of this, has declared that he's not spooked. How self-obsessed—as though the IMF's announcement was a challenge to him personally rather than a substantive policy challenge for the Australian economy. His response indicates that his intention is to deliver more of the same, which is absolutely nothing. Unfortunately, that is not going to cut it. The Reserve Bank has cut the cash rate five times since 2016 to the current record low. The IMF has called on countries, including Australia, to provide fiscal stimulus and invest in infrastructure to support their economies and improve productivity. According to the IMF, monetary policy cannot be the only game in town and should be coupled with fiscal support where fiscal space is available.

They're far from alone. Serious economic commentators from Deloitte Access through to the Reserve Bank have been calling for fiscal responses to Australia's stagnating growth. And there are plenty of options for the government. They just need to look at the mounting pile of policy concerns—problems that they are willing to ignore at the moment: wages policy, energy policy, an increase to Newstart, infrastructure investment and a plan to stimulate business investment. All those options are on the table but not on the table for this government, which refuses to take responsibility for the economy. They have allowed real problems to develop in the Australian economy during their six years in office, and this is not something that the PM can fix with a pithy slogan or a tricky messaging strategy. He has to do something real. It is time for him to act.

3:33 pm

Photo of David VanDavid Van (Victoria, Liberal Party) Share this | | Hansard source

I rise to take note of answers in question time that highlight the government's positive plan for a strong economy that creates more jobs for Australia. As Minister Cormann has stated in question time today, the fundamentals of the Australian economy remain sound. We have a AAA credit rating, record labour market participation and welfare dependency at its lowest level in three decades. We are in our 29th consecutive year of economic growth, a record unmatched by any other developed nation.

However, as the minister did outline, we do face headwinds. The IMF World Economic Outlook confirmed that global economic growth has slowed, with 'rising trade and geopolitical tensions' that are 'taking a toll on business confidence, investment decisions and global trade.' IMF global growth forecasts have been downgraded by 0.3 percentage points since their April update to three per cent for 2019, its lowest level since 2008-2009.

While Germany, the United Kingdom, Singapore and other economies experienced negative economic growth in the June quarter, the Australian economy remains resilient and continues to grow. But the international challenges are a stark reminder of why we must stick to our economic plan. It will deliver lower taxes so that Australians can keep more of what they earn. It will create more infrastructure, creating jobs, boosting productivity and returning the budget back to surplus so that we can meet the challenges ahead.

Not only is our economy strong; we are also focused on job creation. Unemployment growth is currently at 2.6 per cent, which is more than twice the OECD average and more than three times what the coalition inherited when we came to government. Labour force figures released last month by the ABS underline the continuing strength of the Australian labour market, with seasonally adjusted employment increasing by 34,700 jobs—exceeding all market expectations—and a record high of almost 13 million jobs in August 2019.

In my maiden speech I said the government must do as much as possible to ensure that there are fewer roadblocks to people being able to work, and I believe this is exactly what the coalition government is doing. A record number of Australians are in work, and the participation rate has never been higher. More than 1.4 million new jobs have been created since we came to office, and around eight out of every 10 new jobs over the past year have been full-time. The coalition government has a plan that supports the creation of more jobs, and small business plays a major role in this plan. They are the major supplier of jobs and the backbone of our economy. I wish more of those opposite had created jobs instead of being political hacks or unionists. According to the small business council report released in July 2019 by the Australian Small Business and Family Enterprise Ombudsman, around 98 per cent of all Australian businesses had 19 or fewer employees. Over 230,000 small businesses have been created since 2013-14, with 75,000 created in 2017-18 alone.

Good economic management runs in the blood of the coalition. We have a track record of delivering red tape savings. Between September 2013 and December 2016, for instance, our cutting-red-tape initiative resulted in $5.8 billion being reported as red tape savings. That means Australians are now investing $5.8 billion in their businesses or spending it elsewhere in the economy. This is good for small business, good for jobs and good for our economy. The government is also helping small business to invest and grow through increasing and expanding the instant asset write-off. This initiative now covers assets up to $30,000 for businesses under $50 million. Those on this side of the chamber are focused on ensuring that our strong economy is working. We're supporting small business— (Time expired)

3:38 pm

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

I want to take note of the answers to questions that were put to Senator Cormann. Isn't it absolutely amazing, when we've got them coming in here—and I really enjoyed listening to the senators before me—talking about 'our priorities' from the list on the Liberal Party talking sheet, because, when you start looking at some the things they put in their talking sheet, you start to see the sorts of rhetoric they use in debate about the serious economic challenges facing the Australian economy. The Prime Minister, in the talking points, said:

… "from our Government you have seen certainty, you have seen stability. You've seen a plan, and a plan that we took to the Australian people, a plan that we put in our Budget, a plan that foresaw the challenges that Australia was going to face, and a Government that's just steadfastly getting on with implementing that plan."

Well, that plan has brought us an economic growth rate that is lower than Greece's. Did you think that you could possibly turn it around by putting out a rhetoric sheet, when you've had the economy growing at a rate that is less than Greece's? Greece has been in a depression for seven years and now has a higher growth rate than Australia! Look at the growth, and the slower growth rate, that we have compared to the US, Spain and New Zealand.

I like a bit of competition with the Kiwis; I've got a brother-in-law who's a Kiwi. But they're beating you. And there is a big difference: they've got a Labor government, so that's the first reason they've got some good thought about how to move their economy forward. But unfortunately this government doesn't have a plan. They have a plan about talking about a plan they don't have. Their plan—if it exists—doesn't rate with the RBA; they've downgraded growth. It doesn't rate with the OECD; they've downgraded growth again for Australia. It doesn't work for the IMF; they've downgraded growth for Australia as well. That's the trifecta.

What's clear is that we have a situation in this country where people are under incredible stress because of the mismanagement by this government of this economy and their failure to turn around and recognise the seriousness of the challenges that we're facing. The Australian public are fully aware, but the government doesn't seem to be. Unemployment in Australia is now at 5.3 per cent. Youth unemployment in Australia is now twice that—a whopping 11.7 per cent, and in some regional areas it is as high as 20 per cent. Underemployment is now a disgraceful 8.5 per cent, and youth underemployment is at 20.9 per cent. But don't worry: they have a plan. Well, the plan's not working. The OECD's telling you; the RBA's been telling you for months; and of course the IMF has blown the whistle on you about the fact that you've failed to act in a way that is economically responsible.

What's clear about the future in this plan from the government—among the things they put in their talking points for 14 October was lower taxes, so you can keep more of what you earn. Well, bring the tax cuts forward. We need to actually turn around and stimulate the economy. Their second point was: reduce the cost of doing business. Energy—well, there's no plan there. Deregulation, finance—well, we've seen the banking royal commission, and we're still waiting for the full plan, and there's no plan there. And this is the one I find absolutely disgraceful: getting paid on time. This is point 2 of their two points of their big plan.

You only have to talk to small business. Prior to being here I had the pleasure of representing the largest small-business organisation in this country—probably larger than all the other small-business organisations put together, representing owner-drivers. Regarding getting paid on time, the only people who have turned around and stopped payment on time are this government. The average payment time is 240 days for trucking companies in various parts of the economy. It's averaging 90 to 120 days in other parts of the economy. The time for waiting to be paid is blowing out. Yet this was the government—along with the previous, Turnbull, government—that turned around and got rid of payment time of 30 days for owner-drivers. (Time expired)

3:43 pm

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

I rise to speak on this motion to take note of answers because I'm struck by the lack of economic literacy of those who stick to their talking points without any semblance of self-examination as to what their contribution has been to the lack of economic confidence in the broader community. There is no doubt about that. But it is because of the political circus that has been fuelled by an opposition that has always sought to get its own way—a previously rudderless or lacklustre leadership in the Liberal Party and a motley bunch of crossbenchers. And when Senator Gallagher said that she's not going to point the finger, I thought, someone has to point the finger; someone has to say who is responsible for this. They've been warned time and time again that every time they whack more borrowed money into funding additional child care, the cost of child care goes up. Do not now complain that it's unaffordable. Do not come to us and say that the answer to the economic problems in this country is for the government to borrow more money to boost the wages of public servants or the unemployed.

You can get the same result by minimising the size of government, by cutting taxes. But why can't we cut taxes in this country? Because the socialists on the other side of the chamber will not allow it to happen. These self-same socialists are now trumpeting Greece and Spain as somehow the saviours of the economic growth of the world. These were bankrupt economies that had to be bailed out to the tune of hundreds of billions of dollars. Do you know why? Because in Greece they had cradle to grave welfare where people would retire at 36 for 40 or 50 years on a fully funded state pension. In Spain the renewable experiment they've foisted upon us bankrupted the country. In Spain such was the extent of the subsidies for renewable energy, solar energy, that they would pay to run diesel generators to put lights on at night to generate supposedly solar power. This is the utopian ideal that we are getting peddled by those who now don't want to point the finger but will celebrate that these countries go from negative growth—where they are absolutely bankrupt—to suddenly having a glimmer of light, because there is some fiscal responsibility applied to them as the great panacea and the great model for the rest of us.

The buck has to stop somewhere. The buck has to stop with some critical self-examination of the policies that have been put forward by the Labor Party, by the Greens party and by some of the more left-wing subsidists in the Liberal Party over the last decade or so.

Senator McAllister made the point that the Liberal Party, and the coalition, is meant to be the party of individual responsibility. Well, so they are. People can make determinations about what to do with their money and they will act in their best interests. What are they deciding now? Their best interest is to actually pay down debt, because they know there are low interest rates. It is a buffer for future problems. It is savings for a rainy day. Any normal-minded person would say, 'If it's good for a household to pay down debt, and if there are demands for states to pay down debt, wouldn't it be advantageous for a federal government or a Commonwealth government to actually pay down debt rather than just continue to rack it up at the tune of $50 billion a year like it started under the Rudd-Gillard governments?'

It was only a decade or so ago we had zero national debt in this country. Now all of a sudden we are on the hook to the tune of $550 billion. The first glimmer of hope is the fact that the Morrison-Frydenberg government is going to deliver a very modest surplus this year and those on the other side want to hijack that and take that away. They are robbing from the future to pay for the excesses of today. It is time to say enough is enough. We've got to get government to live within its means. We have to take our medicine for the failures of this place over the last decade or so, because every time someone says the answer to a bad government program is to pump more money into it, we're stealing from our children and our grandchildren. We are stealing from the future. I've lost track of the number of times everyone has said, 'I can't support this program, because there is not enough money going into it.' Measure the effects of what you have delivered. You've delivered uncertainty to a community. You've delivered debt levels that are unprecedented. You've delivered lower literacy and numeracy rates than we've ever seen. You've delivered the most expensive electricity that we've had in the history of this country. It's all because they will not deal with the reality of circumstances.

Question agreed to.