Wednesday, 12 May 2021
Questions without Notice: Take Note of Answers
That the Senate take note of the answer given by the Minister for Finance (Senator Birmingham) to a question without notice asked by the Leader of the Opposition in the Senate (Senator Wong) today relating to wages growth.
Senator Wong's question concerned wage stagnation that the government that Senator Birmingham is part of has presided over for eight long years, wage stagnation which this budget predicts will continue. In fact, the budget that the Treasurer, Mr Frydenberg, brought down last night represents a real wages cut and is an admission of failure by this government. Even after spending $100 billion and racking up a trillion dollars in debt, the wages of Australian working people will still go backwards in this government's budget, which is a pretty extraordinary admission of failure. After everything Australian workers have been through together and particularly after the last year of struggle, the thanks they get from the Morrison government is a cut in real wages. It's a stunning outcome from the budget and not an outcome which this minister should be proud of in any shape or form. Yet, he responded to questions today with the smugness and spin that we've become accustomed to from this government, which is quite happy to make all sorts of announcements and walk away from the consequences for ordinary Australians.
That's what this government does: announcement, announcement, announcement, re-announcement, re-announcement, re-announcement. But they walk away from the consequences of their actions in budgets that affect ordinary Australians. We've seen the same shirking of responsibility from the Morrison government in the response to the horrific bushfires. We've seen it with the floods. We've seen it with recovery from natural disasters. We've seen it with quarantine and the vaccination rollout. We've seen it in aged care. We've seen it in that litany of failure with the vaccine rollout. They've continued to fail to act in the best interests of working Australians. We've seen a failure to take any responsibility and a failure to act.
Labor has said all along that part of the task at hand is getting unemployment down but also addressing underemployment. People can't find the hours of work that they need to support their loved ones. We know, and this minister knows, that, until that's addressed, we won't get wages growth. The minister knows very well there are other issues which are preventing people from getting good, secure, well-paid jobs.
Then we have the industrial relations system, the childcare system, skills and training, concentrated disadvantage—a whole range of issues which haven't just been ignored over the last eight long years of this government but have been actively made worse. Having racked up all that debt and spent all that money, Minister Birmingham and his government are missing a massive opportunity to set the economy up for a future where working people actually get a slice of the action when it comes to this economic recovery. It's simply not a recovery if Australian workers are worse off at the end than they were at the beginning. Deloitte Access Economics has forecast that workers could be waiting for up to five years for wages growth to return to two per cent. Two million Australians are either without a job or don't have enough hours, and wages are stagnant.
What is very, very clear is that this government is using the pandemic to continue to lock in low wages and insecure work, and it has every intention of continuing that mission. What we can look forward to under this government is a patchy recovery that's defined by even weaker wages growth, following record low wages growth under the Liberals prior to the pandemic. What we all know is that wages growth has been too slow for too long. With the current condition of our economy and the policies to repress wages presided over by this government, unemployment may need to go very low before wages growth hits acceptable levels and starts to feed through into inflation. This government has presided over a repression of wages in this country for eight long years. Huge numbers of jobs have been casualised and pushed into labour hire; there have been relentless attacks on unions, the offshoring of jobs, constant arguments for tiny or no increases in the minimum wage and a wages policy to crush the wages of its own employees that just beggars belief. What we need is real vision, not this pathetic rabble that responds to newspaper headlines and has no coherent plan for the country. (Time expired)
I just look at those opposite over there, and clearly they weren't paying attention in year 7 economics. There's a book that perhaps they should have a look at called Economics for Today. It's a year 7 textbook. It might help them understand a little principle in economics called supply and demand. When you work on reducing unemployment and workers become harder to come by, it actually means employers will pay them more.
Do we need to have a little talk about inflation as well? When last year we were in the midst of a global pandemic, when businesses were closing down and shutting their doors and all the states were locking up their borders, that made it harder for people to maintain their jobs. So what the Morrison government did was ensure that people could still put their kids in child care by making it free. When we look at inflation figures and all of a sudden lots of costs that families normally endure no longer have a cost, that means there's a thing called lower inflation. We get lower inflation. When we look at what that means to wages in the year where we get higher inflation, that means it kind of looks like real wages are going down, but in effect they're not; it's just being covered by the return to what we could call a more normal rate of inflation—around three or 3½ per cent—rather than zero, as was experienced during the 2020 pandemic pretty much across the globe.
Let's talk a little bit more about job creation. I know those opposite get their wages primarily from the unions and they're probably on a scale indexed every year, so they go up more on confidence rather than capability, but let's never let that get in the way of a promotion within the union movement. For those of us that live in the real world—the 80 per cent of people who are employed by small and medium-sized businesses—wages are determined by how successful the business they own or work in is. How tough it is for employers to get staff, because if it's harder to get a staff member, you normally need to offer more money or an inducement to get them to come and work in your business. Again, for all of those who didn't pay attention: supply and demand. When the demand for workers is greater and the supply is shorter, wages will go up.
Last night, in the budget, we saw what the Morrison government is doing to ensure that the Australian economy keeps powering on. We are best placed in the world with our recovery. We have a health situation where the virus has been suppressed—not the McGowan strategy of completely extinguishing it but the suppression strategy we undertook at the beginning, which has been successful—and businesses are thriving and we're starting to see life, in a lot of ways, go back to pre-COVID conditions. We want to make sure that that economic growth continues. We want to make sure that businesses are able to continue expanding and employing more people.
How are we going to do that? We're going to ensure that things like the instant asset write-off continue into the future so that we continue to see the capital markets, so that we see people investing in machinery for their businesses or tradies buying a new ute. We're making child care more targeted when we talk to low- and middle-income families, so we're going to make it easier and more affordable for people to take on additional days of work. It's the Morrison government that's focused on seeing businesses grow, it's the Morrison government that's committed to ensuring Australia's economy comes back and it's the Morrison government that is putting Australia and its workers first.
We have seen that when over 99 per cent of businesses that employ over 11 million workers write off their eligible asset, those businesses that traditionally suffer during times of downturn have in fact thrived. If you go out to WJ Matthews in Moree, a fair few headers and tractors have been bought, but that normally wouldn't have happened. That's a significant number of jobs for a country town. Guess what? It's pretty tough to get a mechanic out there. Supply and demand, guys; that's how you keep the wages growing.
It's always good to hear my good friend on the other side of the aisle, Senator Hughes, talking about numbers and economics, as if the Liberal Party are the only ones that can understand such concepts. But what they fail to understand is the very question that Senator Wong asked today of Senator Birmingham, who is meant to be the Minister for Finance in relation to page 37, These were very simple questions with respect to cuts to real wages. When you do look at the numbers and you do look at the figures in Budget Paper No. 1 on page 37, it is very clear that there is a cut from 1.8 down to 1.25. That is simple accounting. I don't know what you want to call it, Senator Hughes, but that is very simple maths when it comes to very clear cuts to real wages for Australian workers by this federal government, the Morrison Liberal-National government. Let's not forget that: black and white, on page 37. Yet they couldn't answer that simple question—three simple questions, in fact—that Senator Wong put to Senator Birmingham. It took a while for the government to finally acknowledge: yes, $1 trillion of debt. Who would have thought? I remember going to uni, studying economics, and never in my wildest dreams would I ever have imagined being in this place confronted with $1 trillion of debt and growing.
I did not miss the pandemic, Minister. It is just amazing when those opposite try to lecture us on this side that they somehow are better economic managers than we are, but quite frankly the record speaks for itself. Once again what we've had is more spin than substance, and we know that this budget that was handed down last night is by no means a budget whose purpose is to support working people. Nor is it a budget that does what it takes to usher forward the recovery of the Australian economy from the pandemic, and this should hardly be surprising. After eight long years under the Liberal-National government, we've all become rather used to budgets like these. One only has to look at the flop of last year's budget's JobMaker scheme, with the headline of 450,000 new jobs. Where are they, Minister? Come on: 450,000 jobs—where are they? Yet the budget is forecasting that we maintain migration levels at 160,000, so this government's priority is bringing more foreign workers into this country rather than supporting local Australians in finding work. Unemployment is at around five to six per cent, and that will fluctuate.
Senator Ruston interjecting—
It will, yet this government has no incentives encouraging those people to find work. There are lots of businesses around the country right now who are screaming blue murder. They need workers. They need help. What are the incentives for getting those people into a job? It feels like this budget is all about trying to make sure that we can get migrants into this country—cooks, chefs, nurses. Are we really not in a position to train our young people for these jobs?
Don't you worry, Minister; I'll be going through this and I'll be making my contributions in this place and making my views well known about this government's lack of history of supporting traineeships, because what we've seen is a cut, not an increase, in support. You've taken $400 million out of universities—come on!—at a time when we need to be upskilling people.
Come on, Minister. We know the facts: 12 months on we know that the JobMaker scheme, originally funded for $4 billion, has actually delivered only $100 million of that amount, and only 2.5 per cent of what was spruiked has actually made it out the door. I don't have much time left, but I did also want to touch on the fact that household debt in Australia is at scary levels. We are looking at household debt of around 185 per cent when you look at the ratios. How on earth can people pay off their debt when this government keeps cutting wages of Australian workers? You are, and shame on the government.
I think the Labor Party have jumped ahead a couple of steps, because, when we talk about wage growth in Australia, that obviously implies that someone has a job, and thanks to the economic stewardship of the Morrison government through the most calamitous economic event to beset this nation since the Great Depression, 75,000 more Australians are in work than were in work in March 2020. So I think, to set the record straight today, it's worth cutting through the spin that we hear from those opposite and going back to where this nation was in March last year. At that time, Treasury feared that unemployment would reach 15 per cent and that the economy would contract by an incredible 20 per cent. That would have taken two million Australians out of work, Senator Ciccone—not in terms of giving them a wage cut but throwing them out of employment entirely. In fact, in the first few weeks of the pandemic, we saw almost a million Australians lose their job or be stood down with no hours to work. How far we have come! Now 13.1 million Australians—or 75,000 more than at the start of the pandemic—are in work. That represents an unemployment rate of 5.6 per cent, which happens to be lower than that bequeathed to us by the Labor Party. Let's not forget that their big-taxing, big-spending agenda had more Australians on the unemployment queues than the economic stewardship of the Morrison government.
What does that actually deliver for Australians? Aside from the enjoyment of the benefits of work, such as connectivity to their communities and the ability to contribute to their families, that 5.6 per cent unemployment rate and a trajectory towards full employment increases the pressure in the labour market that will naturally drive wages growth in this country. So, once we see the economy continuing to recover from this global pandemic and once we see even more Australians in work, which is the fervent hope of everyone over here on the government benches, we will see higher levels of wage growth and higher levels of prosperity. And, ultimately, it is those healthy and wealthy societies like ours that concentrate on delivering services for the most vulnerable in our communities. At the end of the day, it is the sort of economic comeback that we see here in Australia today that pays for the increases in NDIS funding and that pays for the increased funding to record levels for our aged-care sector. That is the achievement of a strong economy. The Prime Minister, the Treasurer and those in the Morrison government don't talk about a strong economy for the sake of it. We're not obsessing over the numbers on page 37 of Budget Paper No. 1 and trying to find something to quibble over. Instead we're focused on the lived reality out there in the Australian community and improving it for future generations of Australians.
That's the achievement that we see here today. Whilst the economies of the UK, France and Italy contracted by eight per cent last year, and Japan and Canada contracted by five per cent, Australia's economic contraction was limited to just 2½ per cent, and we are returning to growth in the 2021-22 financial year. Incredibly, we're talking about GDP growth of 4.25 per cent in the financial year ahead. That is the benefit of the Morrison government's economic stewardship, and that is what will deliver wages growth in Australia going forward. The outcome that we see today was driven by stronger growth in private sector wages, which increased by 0.7 per cent to be 1.4 per cent higher than they were a year ago. So the wage price index in Australia has increased to be 1.4 per cent higher than it was a year ago. But the Morrison government isn't done yet. No, we're not resting on our laurels after delivering the strongest quarterly outcome in private sector wage growth since March 2014 and, in fact, the second-best quarterly result under this government. We will continue to manage the economy, promote full employment, keep Australians in work, and deliver for those most vulnerable Australians, who rely on a strong economy to provide the safety net that they depend on.
We asked Senator Birmingham a very simple question today, a question that Australians want an answer to: how long will they have to wait for a pay rise under this government? They are still waiting for an answer to this critical question, and they are waiting for some evidence that this government even cares about their wages. We can find some evidence for the Australian people to help answer this critical question, which we asked today on their behalf, in this government's pathetic record on wages. There have been eight long years of record low wage growth under this government. Low wages are a deliberate design feature of their economic plan.
Today Australians are expected to believe that Australia is coming back, as the Treasurer said last night—coming back while their wages are falling behind. There is no recovery from this pandemic that leaves workers behind. There is no recovery that lets Australians' wages go backwards. There is no recovery without good, secure jobs for Australian workers. The government needed to deliver that plan this week, and they failed. Australians are still waiting for answers to their questions: When will we have good, secure jobs under this government? When will we have a pay rise under this government? When will we even have an answer to these questions from this government?
Beneath the gloss of last night's announcements, there was a very clear message to the workers of Australia: the Liberals love low wages. They love Australians having low wages. According to them, low wages are a deliberate design feature of their economic plan. Under this budget, real wages for Australians go backwards. It is not good enough. It's not good enough for workers who have been waiting years for a pay rise but who have, instead, seen wage growth slow, going to record lows under this government. It is not good enough for the essential workers, who have carried the nation through this pandemic. The thanks they get for that from Scott Morrison and the Treasurer is a cut to their real wages. It is not good enough for the low-paid workers of this country and the growing number of people in insecure jobs, who find it harder and harder to make ends meet. Labor knows and Australians know that there is no recovery when workers are left behind.
We know that the Liberals' happy place is attacking wages. They have been doing it for years. They were coming after workers' wages earlier this year with their nasty IR bill. The budget speaks for itself on wages. You only have to go to page 9 to see that wages for working people will fall even further behind and won't even keep up with inflation. After all of this, after the government announcing spending of $100 billion and racking up a trillion dollars in debt, Australians will not see a pay rise under this government.
Let's be clear about what this means. Real wages are continuing to fall, and the government will not be putting any more money into the pockets of working Australians. They have no plans to get wages moving. What an admission of failure. How many times did the Prime Minister go out to try to thank essential workers and shake their hands during the pandemic? Those low-wage workers—the supermarket workers, the cleaners, the early childhood educators, the delivery drivers—proved themselves to be essential day in, day out. Who does the Prime Minister think will suffer the most from wages falling behind even further? Those essential workers, who got us through 2020 with their hard work. That is the thanks that this government gives them.
Question agreed to.
That the Senate take note of the answer given by the Minister for Finance (Senator Birmingham) to a question without notice asked by Senator McKim today relating to the fossil fuel sector.
In question time I asked Senator Birmingham repeatedly about the budget's public subsidies to encourage the burning of fossil fuels, and he consistently failed to acknowledge that point. He dissembled, he changed the subject and he answered questions that weren't asked, but what he did not ever mention was the $51 billion of direct subsidies—public funds—in this budget allocated to encouraging the burning of fossil fuels.
To state the absolute bleeding obvious, our climate is breaking down around us. It's going to be catastrophic for billions of people. We have mere years to prevent the worst effects of the climate catastrophe, and every single day counts in our response. What did we see in the government's response yesterday? Handouts for fossil fuel companies. We saw favourable treatment for billionaires to encourage more environmental destruction and the ongoing burning of coal, oil and gas. This is a budget put together by climate criminals. And they can't say that they didn't know, because, at the same time that they are giving $50 billion plus of public subsidies to encourage the burning of fossil fuels, they are intervening to insure homes that are becoming uninsurable because of climate change. The government is offering a token amount of money for responses to disasters, like droughts, fires and floods, that we know are going to be more common and more intense as a result of climate change, driven primarily by the burning of fossil fuels, the destruction of forests and land clearing. They are all things that this government puts public subsidies into. The government are the arsonists, and they're trying to claim that they're the fire brigade!
As if paying billionaires directly to open up new gas fields to implement the burning of gas weren't bad enough, the government are also refusing to make billionaires pay their fair share of tax. Australia's billionaires increased their wealth by $90 billion last year, in the middle of a global pandemic, when so many Australians were doing it tough, and they have not been asked to chip in a single cent of that obscene growth in their wealth to help us fund the services that Australian people want: better hospitals, better public education, better public transport systems, better disability support—just to name a few.
Meanwhile, on the government's own projections, wages will go backwards in real terms for the next two years. Let's think about that: wages are to go backwards in real terms for the next two years. This is not a bug. This is not an unintended consequence of this budget. It is a feature of this budget, because the major donors to the Liberal and National parties want to keep wages low so they can keep making obscene profits and keep dodging their responsibility to fund the essential public services that Australians want and expect from their governments. Wages are going backwards in real terms because that is exactly what the government want. And that is because their major donors, in this regime of institutionalised bribery that is called political donations in this country, want wages to shrink. The other side of that coin, of course, is house prices spiralling out of control. Again, that's not a bug. That's not an unintended consequence. It's a feature. You're pricing a whole generation of young people out of the housing market and you are deliberately causing wages to go backwards. Shame on you all.
Question agreed to.