Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

I congratulate the Assistant Minister for Infrastructure and Regional Development on his decade-old diggings, but I am happy to assure the House that I, like all members on this side, do not support a GP tax. The aspiration set by the Treasurer for an additional 0.4 per cent growth per year over the next five years is a perfectly reasonable aspiration, and nobody in this parliament would disagree with it, but an aspiration is not a plan.

There are two very clear plans for growth on offer in this parliament. This side of the parliament believes that growth is driven by investment, by education and by fairness. That side of the parliament believes it is driven by cuts, cuts and cuts—cutting infrastructure, cutting services and cutting wages.

On this side of House, we are committed to building the National Broadband Network. We took Australia from being 20th in the OECD for investments and infrastructure to being first. On this side of the House, we believe in education. That is why we brought forward the National Plan for School Improvement and demand-driven universities. And we believe in fairness. We believe very firmly that government has a role in looking after the most disadvantaged.

But that side of the House is cutting infrastructure. The government does not believe in urban public transport, so it is not investing in projects like Brisbane's Cross River Rail project, the Melbourne Metro, the Perth Airport link and Adelaide's Tonsley Park public transport project. That side of the House does not believe in supporting services, which of course, in a fragile period for the labour market, has a negative impact on demand. If you cut back on that schoolkids bonus, you are taking money straight out of retail spending. But, if you give $75,000 to a millionaire to have a baby, the chances are that they are just going to pay off the mortgage. The spending cuts are going to hit spending hard, and that is going to hit jobs as well.

But also those on that side of the House believe that they need to cut wages. That is their solution every time to boost productivity. You hear the head of the Prime Minister's Business Advisory Council, Maurice Newman, say things like:

… Australian wage rates are very high by international standards and … our system is dogged by rigidities …

Mr Newman gave a speech to CEDA in which he cited a number of countries, among them Canada, the European Union, Britain and New Zealand, and he said that Australian wages were high relative to those countries. What he failed to grasp, as Stephen Koukoulas has pointed out, is that all of those 'low-wage' countries have higher unemployment rates. The unemployment rate in Canada at the time Mr Koukoulas was writing was 6.9 per cent; in the US, seven per cent; in the eurozone, 12 per cent; in New Zealand, 6.2 per cent; and, in the UK, 7.6 per cent. When the going got tough, the Australian system outperformed that of other nations.

Of course, we have seen just recently new data out on wage growth which has given the lie to those who say that the secret to Australian prosperity is to cut wages. We have seen the release of the seasonally adjusted wage price index. In the December quarter, it rose 0.7 per cent, giving a growth rate for 2013 of 2.6 per cent. That is below the rate of inflation, which is 2.7 per cent, so Australian workers have had a real wage cut. This comes after a 35-year period in which wages for the bottom 10 per cent grew by 15 per cent and wages for the top 10 per cent grew by 59 per cent.

And yet those opposite, led by people like Maurice Newman, believe that the secret to Australian prosperity is to cut wages. They are utterly out of touch. And while they want to cut wages, they want to keep open loopholes. As the shadow Treasurer so eloquently pointed out, the multinational tax-shifting arrangements that the government took to the G20 were Labor's arrangements, minus the $700 million measure that the government took out and minus the transparency measure that Senator Sinodinos is going to scrap. Shame, government, shame!

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