Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I would like to start by referring to some of the comments of the previous speaker, the member for Berowra. I have some respect for the Father of the House, the honourable member, but I have to disagree with his analysis of the way in which the previous government went about dealing with the global financial crisis. I also disagree with his analysis about the sort of infrastructure that was required to ensure that we maintained at least 200,000 jobs through that time. Our view at the time, as advised by Treasury and others, was that we had to invest in the economy because of the massive contraction of private capital. As a result, we believe we maintained relatively low unemployment. Our economy grew by well in excess of 10 per cent—higher than any other developed nation at that time.

At the end of the last parliamentary term, at the G20 as the minister for employment, all countries around the table at the employment ministers meeting agreed that Australia's response to the global financial crisis was second to none. The honourable member quibbled about some of the ways in which the infrastructure was delivered. I had some, but very few, complaints. I attended 90 per cent of the investments in schools in my electorate, and the overwhelming majority of schools were entirely pleased. Everyone was pleased to get such an investment. It also meant that not only did we invest in our schools—much-needed infrastructure in many schools; certainly schools in my electorate—but also we maintained and created employment for those small businesses that were so important for dealing with the economic challenges that we confronted. I have to disagree with the previous speaker's analysis in relation to our response.

The previous speaker finished on national security. As a former minister for home affairs and justice and immigration, I agree with him. National security is a very serious issue. The government has had cooperation from the opposition. We do want to work with the government. We do believe that national security is the most significant matter that any national government must deal with. We would hope that we can agree with the government on these matters when they are presented to us. We only ask that matters are provided to us, that we are briefed fully, and we will be able to work with the government in dealing with such a challenge.

It is a significant issue and one on which I do agree with the honourable member. I imagine that the investment that has been made in the government agencies dealing with such challenges was appropriate. Some of the changes—for example, to the budget of the Australian Federal Police—have not all been increases. I am mindful of the fact that when we were in government we increased the AFP numbers by 500. But you are always under pressure to maintain resources in every agency of government, so I should not be too critical there.

However, my fundamental concern with the budget is that it has doubled the deficit. It has forecast increased unemployment in the next financial year to 6.5 per cent. That is an increase that is equal to the highest unemployment rate in 14 years. That would mean that there will be more people lining the unemployment queues in Australia. If the government's own forecast is right, we will see thousands more Australians lining up in unemployment queues. Since the election, we have seen 80,000 more Australians in the unemployment queues than was the case at the time of the last election, and that is forecast to go up. That should be a major concern for the government. But we do not see, in this budget, sufficient plans to deal with this rising unemployment rate. We do not see that there has been sufficient investment, or sufficient industry or employment plans, to ensure that we can mitigate against the rising unemployment. That is a real shame.

It is for that reason that we say the government is not focused on jobs for unemployed Australians. As a result, we are going to see rising unemployment. In particular, we are going to see rising youth unemployment. Youth unemployment is now reaching almost 14 per cent; for those young people between the ages of 15 and 24, it is almost 14 per cent, and in some parts of Australia—Northern Queensland, Northern Adelaide, Northern Tasmania, and parts of Melbourne and Sydney—we are seeing unemployment amongst young people in excess of 20 per cent. That is one in five young Australians in some parts of this country who are not earning or learning. It is a great problem because, as we all know, if you do not enter the labour market and you are not at school, and if you continue to be in a position where you are falling between those two options, then your chances of having a productive life, having a life that is fulfilling and that you can be proud of, becomes increasingly more difficult. It is increasingly more difficult to find work if you have been unemployed for a long period, or if you have not entered the labour market. We believe that there needs to be more effort made in relation to unemployment, and youth unemployment in particular. We do not accept that the measures that been included in the budget are sufficient, although we would say that the announcement by Labor prior to the budget—and indeed, this is something that was followed up on by the government in relation to youth transitions—is the right approach. We believe you need to mentor young people. You need to find ways to connect them to the labour market, because they do not have the experience. Therefore, at least to that extent, we would support the measure in the budget. But there is too little—and, we would argue, too late—from the government.

We had a budget last year that really killed confidence. It scared the Australian people; the rhetoric scared the Australian people. It deterred businesses from hiring, it deterred consumers from spending—and that is why we saw the confidence in the economy flatlining. We only hope that some of those measures which we do support in this budget will lead to some improvements.

It should come as no surprise that we support the instant asset tax write-off because, when I was the small business minister, we introduced the instant asset tax write-off to $6½ thousand. We also had an immediate depreciation on vehicles. We accept the principle that small businesses need mechanisms like these to provide opportunities for them to get cash flow and to maintain their business, and they also reduce red tape—real reductions of real red tape—and so that was another benefit. That is why we opposed the abolition of the instant asset tax write-off in last year's budget. We have a government that came into office arguing that it was the party of small business. It abolished the instant asset tax write-off. It abolished the loss carry-back—which it has not reintroduced—and now it claims that it is doing the right thing. We will support them on the instant asset tax write-off, Deputy Speaker. We do ask what happened to the loss carry-back for incorporated small and medium enterprises. We would have thought it was an opportunity for that Labor initiative to be reintroduced, given the error of their ways with respect to the instant asset tax write-off. We thought it might be fitting for them to reintroduce the loss carry-back initiative, which was so useful for incorporated businesses, along with the instant asset tax write-off which, of course, provides support for incorporated and unincorporated businesses. Unfortunately, we have not seen that happen. So there is some more room for the government to consider.

We also support the reduction in the tax rate for small business, mindful of the fact—as history would show—that the current government joined with the Greens to oppose that measure. We were seeking to find a way to cut the small business rate and it did not occur, so we support that measure. The Leader of the Opposition made it very clear that we would work with the government in a bipartisan way to see if we can reduce that further. We do accept that small business is an absolutely vital part of our economy, of our society. Small business men and women employ between 4.5 and 5 million Australians in up to two million businesses. They are absolutely the engine room of our economy and they do deserve support. I think it would be incumbent on the Prime Minister to work with the opposition leader to see if we can go further in relation to those efforts.

It should not be forgotten that this budget still contains most of the unfair measures of last year's budget. The Labor opposition made a submission to the Fair Work panel—which determines the minimum wage—prior to the budget and then we felt the obligation to make a supplementary submission, which is entirely proper pursuant to the protocols of the Fair Work Commission. We made a further supplementary submission to argue that the commission, when considering the minimum wage, should take into account the very unfair measures in the second budget of this government. We believe that the impact, as NATSEM made very clear, falls most heavily upon low- and middle-income earners. Of the bottom 20 per cent of our society in terms of income, nine out of 10 are worse off, according to that modelling; and, in terms of the top 20 per cent, nine out of 10 are better off. We would say that that is an inequitable situation. We do not want to see people miss out, but we do think that you have to provide support to those most in need. For that reason, we have asked the Fair Work Commission to take into account the adverse impact the budget will have on families who will lose dental care and family tax benefits, and who will be impacted upon because of the abolition of the schoolkids bonus and by the $80 billion that will be taken out of state budgets for schools and hospitals. These impacts will be real, they will be felt and they should be something that the Fair Work Commission considers. We say that they should consider them, but they should do so in a responsible way. We have had a relatively high minimum wage in this country, and that is a very good thing. We believe that we should be a high wage, high skill economy. We do not want to see a million or more workers working below the poverty line. We do not want to see what you see in the United States, where tens of million of people work full time and are still below the poverty line. We do not believe in a working poor and, for that reason, we do not want to see the minimum wage fall over time as a proportion of the median wage. We believe that that should be sustained.

It is important for the Fair Work panel and indeed the commission to do that in a responsible way and it may require doing it over time. It should take into account decisions by government that have hurt low-paid workers and low- and middle-income families. I think that is only proper. For that reason, we made a decision to make that submission to the Fair Work panel so that when they make a determination they can take into account Labor's views on such matters.

I want to finish on the concerns I have with wages growth—something that has not really been touched upon much publicly. According to Australian Bureau of Statistics figures, wages rose by just 0.5 per cent in the March quarter, with an annual rate of increase of 2.3 per cent. Wages growth is the slowest on record, with budget pain to come. We would argue that these unfair measures in the budget are compounded because of the very low wage growth that is occurring in all sectors of our economy. So you have got bracket creep, which is really hurting low- and middle-income earners, and very low wages. It really is a testament to the problems that we have in the economy when you see wages at such a rate and not growing as fast as they have over the last 25 years. It is something the government should take heed of when it decides to impose such unfair measures, including this year's budget. (Time expired)

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